Entrepreneurship 3209

Unit 1 - Section 2

Operating a Business
Primary tasks in Running a Business
Management and Human resources
Production
Financial Planning and Analysis
Legal Issues and Responsibilities
Marketing and Advertising

Successful operation of a business requires

attention to all of these areas of operation

Management and Human Resources

Planning, Organizing and controlling business
operations
Wants to improve
Productivity: The resources used and the products or
services that results. Fewer resources used, higher
productivity
Efficiency: The amount of time or effort put in to get a
product or service. Less effort/time, higher efficency.
Finding employees: Depends on need, qualifications,
training etc.
Retaining employees: keeping good employees;
depends on wages, perks, location, safety age etc.

Production
The factors of production
Natural Resources: The raw material that we get from
the earth, water and air. Primary/extractive industries
Raw Materials: Ingredients that are transformed into
another product
Labour: All the physical or mental work needed to
produce a good or service
Capital: The money invested into a business
Information: to be competitive, a business must have
this. About technology, competition, sources of supply
etc.
Management: The people who control the factors of
production.

Production cont
Steps in producing goods or services
Purchasing (money to buy raw materials required)
Processing (converting one thing into another)
Quality Control (ensures certain standards)
Grading (checked for size and quality)

How can production be improved?

Training, capital investment, technology etc.

Financial Planning and Analysis

Accounting: The process of recording, analyzing,
and interpreting the financial or economic
activities of a business.
Assets: something that has value and is owned by
someone (eg. A House)
Liabilities: Debts or amounts that are owed to
another
Personal equity/Net worth: What you have left after
all your debts are paid off

Assets Liabilities = Net Worth

Owners equity: Net worth for a business

Assets - Liabilities = Owners equity

Financial Planning and Analysis

Reading/interpreting financial statements
Balance sheet: summarizes information about
assets, liabilities, and owners equity. (Shows how
a business is doing on a certain day.) Pg. 282
Liquidity: the ease of converting an asset into cash
(cash is the easiest converted, where a building much
harder it must be sold!)

Financial Planning and Analysis

Income statement: A second financial statement
used to help a business report its profit or loss on
business operations (shows how a business is
doing over time) pg. 287
Revenue (money received)
Expenses (Money paid out)
Net income (profit or loss)

Revenue Expenses = Net income

 Cash flow: The movement of cash in and out of a

business
Statement of cash flow: reports on a businesses cash
flow over a period of time pg. 293

Marketing and Advertising

Marketing: is used to sell what a business
makes and to manage a businesss brand(s)
Includes research, development, sales,
distribution, advertising and promotion.

Advertising: the paid use of various types of

media to try and convince consumers to buy a
particular product or service

The 4 Ps and 2 Cs of marketing

Product: good product (or service) development
look at: quality, design, features and benefits
Price: How high or low the price is can effect
profit. How price sensitive is the product? (how
will sales change with a change in price)
Place: the path that a product goes in from
producer to consumer (can be direct, indirect or
specialty)
Promotion: Any attempt to sell a product
advertising, coupons, contests, premiums,
samples and special events

The 4 Ps and 2 Cs of marketing cont

Competition: All sellers of a particular
product.
Market share: the percentage of the market that a
company or brand has

Customers: Characteristics of people who buy

our products
demographics and lifestyle (research)

Advertising
Rules for good advertising:
1: attract attention headline that mentions the
brand
2: gain interest simple, easy to read: clear to
the point
3. build desire help the customer want the
product (a problem that your product can solve
4: get action (to buy) summarize the reasons to
buy and where to get it (phone number, map)

*A reason to buy NOW!*

Legal Issues and Responsibilities

Regulations that govern business:
Corporate social responsibility(CSR): Businesses
show this through their values, ethics and
contributions to the community.
Companies that actively support community projects,
keep employees safe and healthy etc.

Duty to report: companies must disclose all

important information to shareholders, business
partners etc.
Employees must report if it comers to there attention
that a law, regulation or policy has been violated.

Legal Issues and Responsibilities cont.

6 major areas of laws for a business in Canada:
Workplace safety
Antidiscrimination
Harassment
Accessibility
Environmental
labor

 http://www.youtube.com/watch?v=CUCSK1Q
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 Primary tasks in Running a Business

Management and Human resources
Production
Financial Planning and Analysis
Legal Issues and Responsibilities
Marketing and Advertising

Journal Entry
Should a company have Ethical or moral
obligations?
Which of the three primary tasks of running a
business do you think are the most
important? Why?

Businesses are Dynamic

Businesses are always changing as a result of
the changing needs and wants of humans.
New products/services enter the market place
Old products/services disappear
Products change

Product Life Cycle

All products have a limited life
Stages:
Market introduction
Growth
Maturity
Saturation
Decline

Business Life Cycle

Businesses often grow and then age
Stages:
Establishment
Growth
Expansion
Maturity
Decline

The Challenge: Businesses must change to

remain relevant in todays marketplace

Economic (Business) cycle

Economy-wide fluctuations (months to years)
Stages:
Economic growth(expansion or boom)
Businesses increase production and sales

Periods of decline (recession)

Businesses have less output, profit and employees

A Successful Business
One that earns a profit while meeting a need
in the marketplace
Factors:
filling a market niche
understanding demographics
responsiveness to change.

Effective Leadership
Also a significant factor in running a successful
business.
Desirable traits include:
calculated risk taking,
vision and passion,
perseverance,
teamwork.

Attracting and retaining customers

Successful businesses work diligently at this
Businesses pay careful attention to:
providing excellent customer service,
determining customers want and providing it,
producing quality products.

ethical behavior and social

responsibility
Consumer and public expectations in ethical
behavior and social responsibility over the
past several decades have increased
A greater awareness about consumer choice
Consumers use this influence to help change
business practices
Boycotting, fair trade, green consumers etc.

http://www.youtube.com/watch?v=l6dZpMwB
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