What is business?

Business is the distribution of goods and services to make profit, it

combines commerce, occupation and resources. They make profit by
‘creating value’ (selling the product at a higher price than the cost of
materials and production, this can also be referred to as ‘added value’) for
people in society.

Simply put business is an institution organized and operated to provide

goods and services by making, buying, selling or supplying these goods
and/ or services for money.

What is management?

The process involving: planning, organizing, staffing, directing and

controlling labor to achieve a goal set by the company

What do business do?- source of economic activity

They identify the needs of consumers or other firms/business (as a

supplier or provider of unfinished or capital goods) and buy resources
which work as inputs for the business as a factor of production to produce
outputs (goods and services) to satisfy consumer needs and wants.

Business is an enterprise that; -combines factors of production

-The aim is to satisfy wants and needs

-make produces (goods and services

-can be small or large (online, physical,

international sold and outlet

-can be private or public (public ltd or

private ltd. based on the shares agreement in the
contract of the business

Factors of production

Land

Without land, production can’t be furthered, it is the origin and primary

factor of production, it is the natural resources; -on the surface

-below the surface

-above the surface

-in the sea

Economically, land is a nature resource whose supply is inherently fixed

To planner land is an intangible space on which development activities

take place, contributing to its use and value

To farmers, its productivity is soil

To economist is it a factor of production

Thus, land is a social and physical entity

Real estate is the term defined as the land, including air above it, ground
below it, any buildings or structures on it and any natural resources on it

Labor

Labor is the work force of a business, it can be skilled, unskilled or

professional

Unskilled- requires no training of a task

Skilled- the development of the ability to complete a task or job

Professional- Has studied and is qualified to work a particular job through

academic achievements

Capital

Man-made aid that are used to produce, capital can represent monetary
resources used to purchase natural resources, land or other capital

Enterprise

Enterprise is the business idea that an entrepreneur or owner has on how

to use land, capital and labor in his/ her business.

Entrepreneur proves the initial ideas, takes the risks with their own
resource and identifies business opportunity in the market,
Entrepreneurship is needed to prove employment and fill market niches

Business Management

Step 1- Vision/mission

A Vision is a clear and compelling picture (or imagines goal) for the ideal
future. A mission being the roadmap on how to achieve this Vision (What
you do? How do you it? Why you do it?)

Step 2-Size & Type of Business

Step 3- PESTEL

Political Factors -Determine Political Factors

-government type

-Funding, grants & Initiative

Economic Factors-Choose economic factors

-inflation & interest rates

-Shifts in the market

Social Factors-Identify Social cultural elements

-population, lifestyles, culture

-Target market

Technological Factors-Add Technology

-advancements, information and communication

Environmental Factors-Don’t forget environmental factors

-ethical issues, pollution, waste, safety

Legal Factors-Add legal elements

-Regulations and standards

-Employment Laws

Step 4- SWOT

Strengths-(Internal) Competitive edge

Weakness-(internal) Can hinder the organizations performance

Opportunities-(external) Leverage for advantages

Threats-(external) Pose a risk to the organization

Business Environment

The sum of all factors external and internal to the business firm and that
greatly influences their functioning

Starting a business
Starting a business means one must have a vision and idea for what they
want the company to be, to achieve these visions they must go through
careful planning to measure success, create a marketing strategy and
analyze competition.

To start up your business you must:

-diligence and careful planning

-Requires motivation and determination

-Should possess sufficient knowledge in the proposed business

-Eliminate the risk factors

-Know the rights pf your business

-Create business Plan

As well as ask the questions of (mostly for home business):

Why should I start a business?

Am I ready to start a business?

Do I need a business plan?

What is the first step to starting a business?

What do I sell?

Who will be my customers?

How much should I charge?

How much will it cost me to start a business?

How do I develop my business idea?

Research-Plan-Fund-Develop-Test-Market-Evaluate

Manager

A manager is a person who is responsible for planning and directing the

work of a group of individuals, monitoring and taking correct action.

They reach the organization’s goals by working with and through people
and the resources of other organizations.

Managing involves:
Staffing-Finding works or finding someone to hire workers, as well as
motivating and developing them to employ their abilities

Controlling-Overseeing the achievement of objectives of all group

divisions and individuals

Leading-Movitating and guiding them to achieve the goals of the company

Directing/Organizing-Movitating and leading to achieve a common

purpose as well as directing/guiding resources

Planning-required to put objectives in place.

Types of Managers

-Top level Management_ those who formulate strategies such as directors

and chief executives

-Middle Level Management_ they develop tactics on how to approve the

strategies and goals given, these include Managers, department
managers, etc.

-First level Management_ execute the operations of the business, they

include supervisors, foremen, sector officers, etc.

Challenges of being a manager:

-Dealing with different personalities

-Directing limited resources

-Motivating workers

-Blending knowledge, skill, ambition and experience

-Success depends on work performance

Emerging Challenges for a manager:

-Globalization -Work Force

Diversity

-Development of Environment -Multicultural Effect

-Quality and Productivity -Empowerment of

the Employees

-Ethics and social responsibility

-Innovation and Change

-Technological development

-Knowledge Management
A Leader must be able to motive, influence and direct the people to
complete tasks in a proper manner.

Leadership

A Leader is someone in authority to lead others to accomplish a goal(s).

Leadership being the influence human behavior to accomplish goals to
improve the organization

Importance:

-Initiates action

-Fulfills goals

-Motivates

-Guides

-Builds confidence

-Takes risks

-Build work environment

There are different types of leadership styles, all suited for a particular
career, person and/or environment

Types of leadership:

Transformational

-Focus on effecting revolutionary change in the organization through a

commitment to the organizations vision

-Transforms the environment and people

-enhances relationships with people involved in the organization

Transactional

-compliance through rewards and punishments

-Direct the efforts of others through tasks

-Focus in tasks

-Management theory

Democratic

-shares decision making and problem solving with workers and employees

-most effective form of Leadership

-communication is important

-Leader makes final decision using workers’ input

Bureaucratic

-specialized system & process of maintaining uniformity and/or authority

-fixed official duties (applying a system of rules ‘by the book’)

Authoritarian

Dictates policies & procedures, direct and controls

Laissez-Faire

-Hands-off style

-All authority or power given to staff (commonly in law firms and among
doctors in hospitals)

-encourages employee creativity

The same as there are different leadership styles, there are also different
types of customers, knowing the type of customs your store attracts or
intends to attract will help determine a market strategy

Customer Types:

Loyal_ Tend to stick to a particular brand or place out of quality,

convenience, etc.

-social media and feedback

-good customer service

-cheap market strategy

-faster repeat sale

Impulse_ Comes into the store on a whim and purchases what seems good
at the time

-Stores uses point of purchase and display to encourage more sale from
these customers

Discount_ Often buys at times of sale, sometimes these encourages a

larger quantity

-Stores often use Banded products

-Discount close dated items to rid them

Need Based_ only gets what is needed

-The placement of the items that complement each other are close and
convenient, encouraging often visits

Wandering_ No specific need or desire but attracted by location, display &

layout

-aesthetic displays and decoration for the store.

Customer Service

A series of activities designed to enhance the level of customer

satisfaction, feels as the product or service has met the customer
expectations. This enhances customers’ experience and therefore
encourages loyalty and sale.

Competition

The rivalry between two or more businesses to gain as much of the total
market sales or customer acceptance as possible.
Market share_ the among of people in a market that are customers to a
business

Features of competition

-Success of one is failure of others

-Competition builds character

-Drives innovation, inspires perseverance and builds team spirit

-A competitor is a business that provides similar products and services

-The presence of competitors in an industry drives down the price of goods

and services (not in all cases)

Who are competitors?

-current businesses

-existing businesses that are looking to break into your market

-people

-complimentary products

-startups/disrupt

Benefits of competition

-encourage creation of new businesses

-wide selection of goods and services

-lower price for customers

Economic benefits

Statie effect

-More choices

-Better quality

-Lower prices

Dynamic

-Management. Processing and technological improvements

-Product innovation

-Efficient resources
Benefits

-prevents waste, fraud and openness

-promotes fairness to the public

-enhance solutions

-improve quality

-cost safety

Learn

-what works and what doesn’t

Adapt

-successful practices

-relevant innovations

Discover

-new strategies

-Unserved market niches

Partner

-Synergize expertise online/offline

-establish joint venture

Five Forces of Porters

-Bargaining power of buyer

-Bargaining power of supplier

-Threats of substitute products

-Rivalry of existing firms

Competitive Environment

Demographic

Economy

Other industries

Technology

Supplier

Substitutes

Customers

Distributors

Government

Prospect

Culture

Competitors

Five Forces of Porters

-Bargaining power of buyer and/or supplier

-Threats of substitute products and/or new entry

-Rivalry of existing firms

Competitive advantage

-Customer support

-Brand

-Price

-Intellectual property

-Access to skilled labor

- Distribute Network

-Cost of structure

-Quantity

-New technology

-Natural Resources
Retailers compete for target customers on five major fronts

-Price fir benefits offered

-Service Level

-Product Selection

-Location or access

-Customer experience

Some types of competition are Direct, Indirect and Non-price

Direct

Products from the competing firms provide the same function, e.g. Coca
cola & Pepsi

Indirect

Competition between firms whose products are not the same but can
satisfy the same consumer needs.

Non-Price

-Special Features

-Sales Promotion

-Packaging

-Advertising

-Personal Selling

-Late-night shopping

-Free Delivery

-Publicity

-Brand Name

-Sponsorship Deals

-After Sales Services

-Raffle and competition prizes