MGTA01H3 Chapter Notes - Chapter Chapter 1: Lemonade Stand, Profit Motive, Customer Satisfaction

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Published on 11 Sep 2018
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MGTA01 Lecture 1 What is a business?
All notes compiled from lecture 1 slides and Introduction to Canadian Business by Chris Bovaird
resources
What is a business?
A business is an organized effort to fulfill needs and wants people are willing to
pay for
Customer satisfaction and profit is the motive for a business
A lemonade stand is an example of a business
5 main characteristics that are common to all businesses:
Organized effort: one or more people have a well thought out idea
Provides needs and wants: a business wants to meet a customer’s needs
Customer satisfaction: this exists because a business produces something that a
customer wants
Revenue from sales: revenue is the money that a business receives from its
customers. The customer will decide whether the good or service provided is
worth the cost
Make profit: businesses are mostly started with the motivation of profit (THE
PROFIT MOTIVE)
The profit motive
It is the desire or financial gain as the main incentive during economic activity
How is it relevant to businesses?
Businesses must understand that time, energy and $ are put in because there is
reason. If no valuable reason, time and money are saved instead.
Why does the profit motive exist?
To identify people who own a business vs. people who work for it
What is the difference between profit and loss?
Profit is the benefit of running a business while loss is the downfall (a business does not
generate enough $ to meet all costs to run)
Goods vs. Services
Businesses produce 2 things: goods and services
Goods
Services
These are tangible products
e.g. Tv’s
These are intangible products
e.g. free healthcare in Canada
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Document Summary

All notes compiled from lecture 1 slides and introduction to canadian business by chris bovaird resources. The customer will decide whether the good or service provided is worth the cost: make profit: businesses are mostly started with the motivation of profit (the. Businesses must understand that time, energy and $ are put in because there is reason. To identify people who own a business vs. people who work for it. What is the difference between profit and loss: profit is the benefit of running a business while loss is the downfall (a business does not generate enough $ to meet all costs to run) Goods vs. services: businesses produce 2 things: goods and services. These are intangible products e. g. free healthcare in canada. What is the difference between revenues and expenses: revenue is capital that flows into a business due to selling a product or service, expenses are the operation cost of a business to provide these goods and services.

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