BBI2O1 - Business UNIT 1 Notes
➤ UNIT 1: Business Fundamentals
》CHAPTER 1: Economic Basics
➢ What is Business?
Businesses come in many shapes and sizes, such as local, regional, national, and/or
global. They are classified by their size, structure, and the role they play in the community.
For-Profit Business
A for-profit business produces or sells goods and services to satisfy the needs, wants,
and demands of consumers for the purpose of making a profit.
By supplying goods and services, a business can make a profit.
● Profit is the income left after all costs and expenses are paid.
● Expenses are the payments involved in running a business and the assets that get “used
up” opening it.
● Cost is the money required to produce or provide goods and services.
Revenue - Expenses = Profit (or Loss)
When a business makes a profit, it can
● Reinvest money for expansion
● Provide improved goods and services
● Give the owner(s) funds to spend on personal needs or wants
The business is considered solvent when debts are paid and financial obligations are met.
Solvency
Solvency means having the ability to pay your debts and meet financial obligations.
,Insolvency
Insolvency is when a business goes bankrupt or is unable to pay their debts and meet
financial obligations. Over time, a business’s failure to make a profit will eventually force an
owner to close the operation.
Non-Profit and Not-for-Profit Organizations
A non-profit and/or not-for-profit organization operates strictly to help people in a
community.
Non-Profit Organizations
The primary motive of a non-profit organization is to raise funds for a specific goal.
Only charities and charitable organizations are called non-profit and are allowed to raise such
funds. These organizations operate to serve people and their communities.
Not-for-Profit Organizations
A not-for-profit organization uses any surplus funds to improve the services offered to
its members. However, they do not distribute profits to members. However, they do not
distribute profits to members. A co-operative, unlike a not-for-profit organization, consists of
an independent association of persons who join together to meet economic, social, and
cultural needs and goals.
Large or Small
A small or medium-sized business (SMB) can be classified by the following
characteristics:
● Employs fewer than 500 people
● Estimated to be over one million in Canada - How much money do they make?
● Provides jobs for more than 60 percent of the Canadian workforce
● Form of Business Ownership
Forms of Business Ownership
Informal descriptions of business ownership include:
● Sole proprietorship ● Corporation ● Franchise
● Partnership ● Co-operative
, Channels of Distribution
A business can be classified according to how it delivers goods or services to the
customer. Some of these categories are:
● Retail (“bricks and mortar”) ● Catalogues
○ Most popular ○ Least popular
● The telephone ● E-commerce
○ Unpopular ○ Online shopping
Role in the Community
A business performs different functions in its community.
Charitable Organization - evident for the community or the charity.
For-Profit Organizations - could sponsor an organization or summer camps
Jobs
A business can be classified by the types of jobs that it provides.
➢ The Role of the Consumer
Producers
Producers are the business that makes goods or provides services that consumers need
or want.
Consumers
Consumers are the people who purchase goods and services from producers.
Marketplace
A marketplace or location is where producers and consumers come together to buy
and sell their goods and services. Businesses use consumer habits plus their own research to
decide what quantities of goods and services they will provide to consumers. Some key
questions that businesses might ask about themselves are:
● When do they want these goods and services?
● Where do they want them?
● How much goods or services do they want?
➤ UNIT 1: Business Fundamentals
》CHAPTER 1: Economic Basics
➢ What is Business?
Businesses come in many shapes and sizes, such as local, regional, national, and/or
global. They are classified by their size, structure, and the role they play in the community.
For-Profit Business
A for-profit business produces or sells goods and services to satisfy the needs, wants,
and demands of consumers for the purpose of making a profit.
By supplying goods and services, a business can make a profit.
● Profit is the income left after all costs and expenses are paid.
● Expenses are the payments involved in running a business and the assets that get “used
up” opening it.
● Cost is the money required to produce or provide goods and services.
Revenue - Expenses = Profit (or Loss)
When a business makes a profit, it can
● Reinvest money for expansion
● Provide improved goods and services
● Give the owner(s) funds to spend on personal needs or wants
The business is considered solvent when debts are paid and financial obligations are met.
Solvency
Solvency means having the ability to pay your debts and meet financial obligations.
,Insolvency
Insolvency is when a business goes bankrupt or is unable to pay their debts and meet
financial obligations. Over time, a business’s failure to make a profit will eventually force an
owner to close the operation.
Non-Profit and Not-for-Profit Organizations
A non-profit and/or not-for-profit organization operates strictly to help people in a
community.
Non-Profit Organizations
The primary motive of a non-profit organization is to raise funds for a specific goal.
Only charities and charitable organizations are called non-profit and are allowed to raise such
funds. These organizations operate to serve people and their communities.
Not-for-Profit Organizations
A not-for-profit organization uses any surplus funds to improve the services offered to
its members. However, they do not distribute profits to members. However, they do not
distribute profits to members. A co-operative, unlike a not-for-profit organization, consists of
an independent association of persons who join together to meet economic, social, and
cultural needs and goals.
Large or Small
A small or medium-sized business (SMB) can be classified by the following
characteristics:
● Employs fewer than 500 people
● Estimated to be over one million in Canada - How much money do they make?
● Provides jobs for more than 60 percent of the Canadian workforce
● Form of Business Ownership
Forms of Business Ownership
Informal descriptions of business ownership include:
● Sole proprietorship ● Corporation ● Franchise
● Partnership ● Co-operative
, Channels of Distribution
A business can be classified according to how it delivers goods or services to the
customer. Some of these categories are:
● Retail (“bricks and mortar”) ● Catalogues
○ Most popular ○ Least popular
● The telephone ● E-commerce
○ Unpopular ○ Online shopping
Role in the Community
A business performs different functions in its community.
Charitable Organization - evident for the community or the charity.
For-Profit Organizations - could sponsor an organization or summer camps
Jobs
A business can be classified by the types of jobs that it provides.
➢ The Role of the Consumer
Producers
Producers are the business that makes goods or provides services that consumers need
or want.
Consumers
Consumers are the people who purchase goods and services from producers.
Marketplace
A marketplace or location is where producers and consumers come together to buy
and sell their goods and services. Businesses use consumer habits plus their own research to
decide what quantities of goods and services they will provide to consumers. Some key
questions that businesses might ask about themselves are:
● When do they want these goods and services?
● Where do they want them?
● How much goods or services do they want?
