MB - Business Activities [LESSON]

Business Activities

A business is any activity that provides goods or services to consumers for the purpose of making a profit. We have already discussed the difference between goods and services and that some companies offer goods and services. A car company like Honda can sell you a car (a good) and also offer automobile repairs to that car (a service).

Some organizations are not set up to make profits. Many are established to provide social or educational services. Such not-for-profit (or nonprofit) organizations include the United Way of America, Habitat for Humanity, the Boys and Girls Clubs, the Sierra Club, the American Red Cross, and many colleges and universities.

Most of these organizations, however, function in much the same way as a business. They establish goals and work to meet them in an effective, efficient manner. Most of the business activities introduced in this module also apply to nonprofits.

  • Goods - tangible, products you can touch. Like an iPad, clothing, groceries, cars, shoes etc.
  • Service - Services are intangible, for instance your bank provides a service, your internet carrier, hotels, airlines, law firms, movie theaters and hospitals are all service companies.

Functional Areas of Business

View the presentation on the functional areas of business.

External Forces that Influence Business Activities

The Economy

A strong economy means consumers have more money to spend and businesses will invest in new products and markets. If an economy is slowing, a completely different message should be sent to consumers. The economic factors that affect a business are recession, unemployment, and currency rates.

  • Recession - A period of temporary economic decline
  • Unemployment - The percentage of the work force that is unemployed at any given date
  • Currency Rates - The rate at which one currency can be exchanged for another.

Government Regulations

Businesses must be aware of changes in laws and regulations that affect their industry. For instance, if the government passes a law that requires your taxi service company to emit less gas fumes, your business has to come up with the money to figure out how you are going to do that! Will you buy new cars with fewer emissions? Or maybe you will have to put in more expensive gas, maybe even provide training for your employees/drivers to learn how to conserve gas. Other government issues could be building codes, health care requirements, minimum wage changes, and international trade issues.

Consumer Trends

Consumer trends are changes in lifestyles, attitudes and opinions of consumers that can affect a business. Like Heidi Klum says on Project Runway, "One day you're in. The next day you're out." A business needs to constantly use research and data to make decisions about the company.

 

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