Learn: What a Business Is and Why Businesses Exist

Welcome!Today we'll explore what a business is and why businesses exist. By the end of this lesson, you'll understand the purpose of businesses and how they meet people's needs and wants.

What is a Business?A business is an organisation that produces goods or provides services to customers. These can range from small local shops to large international companies. Businesses exist to meet people's needs (things necessary for survival, like food) and wants (things people desire but aren't essential, like luxury items).

Why Do Businesses Exist?Businesses exist for several reasons. They help produce products, provide jobs, and contribute to the economy. Some businesses aim to make a profit, while others focus on achieving social or environmental goals.

Purpose of a BusinessThe main purpose of a business is to create goods or services that people need or want. For example, a bakery provides bread (a need) and cakes (a want). Businesses also play a role in solving problems, like making eco-friendly products to reduce pollution.

Goods vs ServicesGoods are physical items, like clothes or electronics, that can be touched and taken home. Services are tasks performed for customers, like haircuts or car repairs. Some businesses provide both goods and services, like a restaurant offering meals (goods) and dining experiences (services).

Types of BusinessesThere are different kinds of businesses based on ownership and purpose. Examples include:Sole trader - A business owned by one person, like a local shop.Partnership - A business owned by two or more people, like a law firm.Limited company (Ltd) - A business with limited liability for its owners.Public limited company (Plc) - A larger business whose shares are sold publicly.Not-for-profit - Organisations focused on social or environmental goals, not profit.

Why People Start BusinessesPeople start businesses for different reasons. Some want to make a profit, while others are motivated by independence or solving problems. Entrepreneurs often take risks to bring new ideas to life, like starting a tech company or opening a café.

Review Time!Great work! You've now learned about what a business is, why businesses exist, and the types of businesses. Let's review with some final questions.