Notesale: Turn your study into money

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What is a business ?
• A business is any organisation that makes goods or
provides services
...
These range
from small firms owned and run by just one selfemployed person, through to large companies which
employ thousands of staff all over the world
...

Goods are physical products such as burgers or cars
...

Customer needs are the wants and desires of buyers
...
A business
start- up is a new firm operating in a market for the first time
...


Suppliers, customers and markets
Businesses buy the products they need from suppliers – firms
selling products to other businesses - and sell to customers
...
Sometimes
the customer and consumer are different people - for example,
parents buy a pen for their child to use at school
...
A market is any place
where buyers and sellers meet to trade products - this can be a
high street shop or a website
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Adding value
In order to create goods and services, a business buys or
hires inputs such as raw materials, equipment, buildings and
staff
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These products are the goods and services used by
consumers
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A business adds value when the selling price of an item
produced is higher than the cost of all the resources used to make
it
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If
the cost of the materials, employees, marketing and all other
inputs used in making one set of sunglasses is just £20, then £80
worth of value has been added by the firm during production

Primary, secondary and tertiary sectors
There are three main types of industry in which firms operate
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• Primary production: this involves acquiring raw
materials
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This is sometimes known as
extractive production
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It involves converting raw materials into
components, for example, making plastics from oil
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Tertiary production: this refers to the commercial
services that support the production and distribution
process, eg insurance, transport, advertising, warehousing and
other services such as teaching and health care
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