Learn: What a Business Is and Why Businesses Exist

Welcome!Welcome! Today, we are going to explore what a business is and why businesses exist. You'll learn some key concepts and check your understanding as we go along. Let's begin!

What is a Business?A business is an organisation that provides goods or services to customers. Goods are physical items like clothes or food, whereas services are actions or activities, such as hairdressing or banking. Businesses exist to meet people's needs and wants. Needs are essential, like food and shelter, while wants are things we desire but don’t necessarily need, like designer clothes or new gadgets.

Why Do Businesses Exist?Businesses exist to create products or offer services that solve problems or meet the needs and wants of customers. They also allow people to work and earn money, while contributing to the economy. Some businesses aim to make profit, while others may have ethical, social, or environmental goals, like charities or social enterprises.

EntrepreneurshipAn entrepreneur is someone who starts and runs a business. Entrepreneurs are often creative and willing to take risks. They are motivated by various factors, such as the desire to make a profit, gain independence, or pursue their passion.

Why Do Entrepreneurs Start Businesses?Entrepreneurs start businesses for different reasons. Some aim to make a profit, as money can improve their quality of life. Others might want independence, so they can be their own boss and make their own decisions. Some are motivated by a passion for a particular idea or product. A good example is someone who loves baking and starts a cake shop.

Types of BusinessesThere are different types of businesses: sole traders are owned by one person, partnerships have two or more owners, private limited companies (Ltd) are owned by shareholders but not publicly traded, and public limited companies (Plc) are traded on the stock exchange. Not-for-profit organisations, like charities, focus on helping others rather than making a profit.

Review Time!Great work! We've covered what a business is, why businesses exist, and the different types of businesses. Let's test your understanding with a few final questions!