Learn: Why Businesses Exist

Welcome!Today we'll explore why businesses exist. We'll learn their purpose, how they meet needs, and why entrepreneurs start them. Let's get started!

What is a Business?A business is an organisation that produces goods or provides services to meet people's needs and wants. For example, a bakery produces bread (a good), while a hairdresser provides haircuts (a service).

Purpose of BusinessesBusinesses exist for several reasons. They aim to produce goods or services, fulfil opportunities, and meet people's needs and wants. Needs are essential for survival, like food and shelter, while wants are things people desire, like holidays or new gadgets.

EntrepreneurshipAn entrepreneur is someone who starts and runs a business. Entrepreneurs are usually risk-takers, creative, and organised. They are motivated by things like making a profit, achieving independence, or pursuing their passion.

Types of BusinessesThere are different types of businesses, including sole traders (owned by one person), partnerships (owned by two or more people), and limited companies (owned by shareholders). Each type has different levels of control, liability, and ways to raise finance.

Business Aims and ObjectivesBusinesses set aims and objectives to guide their actions. Common aims include making a profit, surviving, growing, increasing market share, satisfying customers, and focusing on ethical practices.

StakeholdersBusinesses affect different stakeholders, such as owners, employees, customers, suppliers, and the local community. Each group has different interests, which can sometimes lead to conflicts. For example, customers may want low prices, while employees may want higher wages.

Location of BusinessesThe location of a business is important. Businesses choose locations based on factors like proximity to customers, access to labour, availability of raw materials, level of competition, and cost of the premises.

Review Time!Great work! You've learned why businesses exist, their types, aims, and how they choose their locations. Now let's test your understanding with a few final questions.