Business Characteristics - Student Notes

Directions:
Fill in the blanks.

Types of Businesses Segment

1. Types of Businesses
• Are classified by the work activities performed
• Include:
− producers
_____________
− processors
− manufacturers
− intermediaries
− service firms
− _____________
Non-profit organizations

2. Producers
• Develop products for distribution from raw goods
− _____________
Raw goods are materials derived from natural resources
• Examples include:
− farming
− forestry
− _____________
mining

3. Processors
• Change raw goods into a more finished form
• Produce _____________
processed goods
• Examples include:
− cotton mills
− oil refineries
− _____________
textile mills
− food processors

4. Manufacturers
finished goods
• Change raw or processed goods into _____________
• Examples include:
− juice factories
− _____________
clothing factories
− automobile factories

Accompanies: Business Characteristics 1

 Business Characteristics - Student Notes
5. Intermediaries
• Are referred to as the _____________
middleman
• Move finished goods from one business to another
• Buy, store and resell goods
• Examples include:
− wholesalers
• buy finished goods from manufacturers in large quantities
and sell them to businesses in smaller quantities
− _____________
retailers
• buy finished goods from manufacturers or wholesalers
and sell them directly to the consumer

6. Service Firms
consumers
• Provide services to _____________ and other businesses
• Examples include:
− beauty salons
− landscaping companies
− _____________
plumbing companies

7. Non-profit Organizations
• Provide goods and services to businesses and individuals
• Operate on _____________,
donations volunteers and philanthropists rather
than income/profit
• Examples include:
− Salvation Army
− United Way of America
− _____________
American Red Cross
− YMCA and YWCA

Human Resources & Management Segment

1. Human Resources
• Requires _____________
following laws and proper procedures
• Requires people with strong human relation and communication skills
• Responsibilities include:
− maintaining the employment process
− training and _____________
developing staff

Accompanies: Business Characteristics 2

 Business Characteristics - Student Notes
2. Employment Process
• Is carried out by _____________
• Goal:
− to obtain qualified employees who are well-matched to the open
position
• Steps:
− assess employment needs
− _____________
− select employee who fulfills goals
− help employee get oriented

3. Employment Process
• Step one: assess employment needs
− determine what _____________ in the company need to be
filled
− analyze what the open position involves
− obtain or write job description, including:
• qualifications
• _____________
• responsibilities

4. Employment Process
• Step two: recruit potential employees
− look _____________ first
− contact and utilize the following:
• newspaper and/or Internet advertising
• colleges, universities and technical or vocational schools
• _____________
• employment agencies and/or labor and professional
organizations

5. Employment Process
• Step three: select employee who _____________
− review applications, résumés and cover letters of applicants
− choose applicants appearing to best match company opening
and conduct interviews
• if there is not an appropriate applicant, _____________ at
recruiting potential employees
− review all obtained information and select best applicant

Accompanies: Business Characteristics 3

 Business Characteristics - Student Notes
6. Employment Process
• Step four: help employee get oriented
− introduce to _____________
− help fill out new employee paperwork
− _____________ about company pay, benefits, policies, etc.
− assist during adjustment phase

7. Training & Developing

• Is also performed by human resources
• Goal:
− maintain well-trained, _____________
• Is accomplished through:
− training
− _____________
− focusing on motivation and cooperation

8. Training
• Can be done individually or in groups
• Includes the following techniques:
− _____________
• companies train employees while they work
• employees have hands-on practice with supervision
• occurs typically on an individual basis
− _____________
• companies teach new skills to several employees at once
• employees listen and learn from each other
• employees get the opportunity to express ideas and share
experiences

9. Evaluating Performance
• Is often achieved through performance appraisals
− managers evaluate _____________
− managers provide feedback to employees
• Helps when making decisions, including:
− transfers
− layoffs
− _____________
− terminations

Accompanies: Business Characteristics 4

 Business Characteristics - Student Notes
10. Focusing on Motivation
• Can help meet employees needs
• Includes two types:
− _____________
• motivation through outside sources
− for example: money, benefits, recognition
− _____________
• motivation occurring internally
− for example: challenge, enjoyment, accomplishment
What motivates you to do well in school or hobbies? Are they extrinsic or
intrinsic motivators?

11. Motivation
• Can be ensured by meeting _____________, including:
− hierarchy of needs proposed by _____________:

12. Focusing on Cooperation

• Improves the output produced by _____________ in groups
• Is needed to ensure high work quality and employee job satisfaction
• Requires effective communication in order to:
− enhance group dynamics
− ensure employees know and _____________
− encourage employees to contribute ideas

Accompanies: Business Characteristics 5

 Business Characteristics - Student Notes
13. Management
• Is the process of reaching a company’s goals and objectives by
_____________
• Has these four main functions:
− planning
− organizing
− _____________
− controlling

14. Planning
• Is management’s _____________
• Means determining a direction for the company
• Includes the following:
− setting long- and short-term goals
− determining strategies to utilize company resources
− _____________

15. Organizing
• Is management’s second main function
• Means obtaining and coordinating resources to meet _____________
and objectives
• Includes the following:
− creating structure
− dividing up the workload
− _____________
− coordinating activities

16. Directing
• Is the third main function of management
• Is _____________ to carry out their assigned tasks
• Includes the following:
− staffing
− motivating
− _____________
− guiding

Accompanies: Business Characteristics 6

 Business Characteristics - Student Notes
17. Controlling
• Is management’s fourth main function
• Is _____________ meet expected goals and objectives
• Includes the following:
− evaluating employee performance
− _____________
− setting standards for desired performance

18. Management
• Is most effective when _____________ functions play an important
role
• Is responsible for making sure the company runs smoothly
• Must remember to _____________ regularly and provide feedback to
the appropriate personnel

Finance & Accounting Segment

1. Finance & Accounting
• Are vital because a business cannot exist without cash flow
• Focus on the following:
− creating _____________, accurate financial statements
− making a plan to create profits
− managing and utilizing _____________

2. Accounting
• Is a system used to record, classify, _____________ and report the
financial position of a business
• Responsibilities include:
− recording _____________
− creating financial statements

Accompanies: Business Characteristics 7

 Business Characteristics - Student Notes
3. Financial Transactions
• Are financial entries affecting the financial position of a business
• Include these classifications:
− _____________
• items of value owned by a business
− examples include: cash, land, buildings, equipment
− liabilities
• debts or obligations of a business
− examples include: credit, mortgage payments
− _____________
• amount of capital invested by owners
− total value of assets minus liabilities

4. Financial Transactions
• Include the _____________:
assets = liabilities + owner’s equity
(both sides of the equation _____________)
• Are recorded, classified and summarized, providing information used
to create financial statements

5. Financial Statements
• Are the reporting process of accounting
• Are used to make financial decisions
• Include two main types:
− _____________
• reports totals in asset, liability and owner’s equity
accounts
− _____________
• reports net income or net loss of a company
− net income
• when revenue is greater than expenses
− net loss
• when expenses are greater than revenue

Accompanies: Business Characteristics 8

 Business Characteristics - Student Notes
6. Financial Statements – Balance Sheet Example
• Kay’s Kloth Shop
• Balance sheet

7. Financial Statements – Income Statement Example

• Kay’s Kloth Shop
• Income Statement

8. Finance
• Goal:
− determine use of company resources and _____________
• Responsibilities include the following:
− managing use of company funds
− obtained needed funds
− creating a _____________

Accompanies: Business Characteristics 9

 Business Characteristics - Student Notes
9. Finance
• Funds are used to do the following:
− _____________ used to create goods and services
− pay expenses required for operation
• When available, excess funds can be used in many ways including:
− purchasing assets to help the company grow
− paying unexpected or high expenses
− investing to _____________

10. Finance
• Sources of funding include:
− _____________
− selling stock
− looking for new investors
− increasing owner contributions
• The financial plan does the following:
− specifies what funds are needed
− documents period _____________
− is crucial to the success of a business

Marketing, Production & Distribution Segment

1. Marketing
• Is the action of promoting and selling products or services
• Goal:
− to create products meeting consumer wants and needs based
on the _____________
− to guide products through the product life cycle, capitalizing on
opportunities in each stage
− to _____________ through marketing research

2. Marketing
• Becomes successful with certain characteristics:
− directing marketing strategies to a target audience
− knowing where company content fits in the buying cycle
− using _____________
− providing meaningful images in content marketing
− using interesting, varied media
− guiding consumers on _____________
− expanding and extending a product’s reach

Accompanies: Business Characteristics 10

 Business Characteristics - Student Notes
3. The Marketing Mix
• Consists of four interrelated marketing strategies used to meet
consumer needs
− _____________
• is a good and/or service designed to meet consumer
wants and needs
• is determined by conducting studies and surveys
− _____________
• must be low enough to attract consumers
• must be high enough to cover costs and create profit

4. The Marketing Mix

• Consists of four interrelated marketing strategies used to meet
consumer needs
− _____________
• activities to persuade consumers they need the product
• includes packaging, commercials, trials, etc.
− _____________
• is a location where products and/or services are sold
• includes stores and location within a store

5. Product Life Cycle

Accompanies: Business Characteristics 11

 Business Characteristics - Student Notes
6. Understanding Consumers
• Means understanding the needs they attempt to meet when making
purchases, including:
− _____________
• for necessities, safety, security and health
− includes food, clothing, transportation, etc.
− social
• to feel loved and accepted
− includes fancy clothing, make-up, cologne, etc.
− _____________
• for prestige and approval
− includes luxury items which make the consumer feel
important
Remember Maslow’s hierarchy of needs pyramid? These apply for
consumers too.

7. Production & Distribution

• Goal:
− to produce and distribute goods and services in the most
efficient and cost-effective manner
• Consists of three roles:
− _____________
• physical elements needed for production
− need a good layout and location
− processing
• changing or combining resources to create a product or
service
− adds value by transforming resources into products
− _____________
• invaluable human resource
− plan, operate and supervise the process

8. Production
• Must be effective and efficient by doing the following:
− _____________ demand
− scheduling production of goods and services
− managing inventory
− _____________ quality

Accompanies: Business Characteristics 12

 Business Characteristics - Student Notes
9. The Production Concept
• Refers to the _____________ buyers prefer goods and services
which are widely available and inexpensive
− the basis of this concept is the emphasis on low production
costs, _____________ and mass production

10. Factors of Production

• Are the resources available to supply products and services
• Include:
− _____________
• natural resources available for production
− labor
• human input for production process
− _____________
• man-made objects, such as machinery and equipment,
which are used in production
− entrepreneurship
• the drive to develop an idea into a business

11. Distribution
• Is getting produced goods and services to consumers in a
_____________
• Is typically from producers to wholesalers and retailers
• Uses the following four modes of transportation:
− waterways
− railroads
− _____________
− airlines

Accompanies: Business Characteristics 13