Business Revision Notes.
What is a business?
What is a business?
A business is an organization involved in the trade of goods, services, or both to consumers. An organization or economic system where goods and services are exchanged for one another or for money. Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit.
What is a 'Franchisor'?
The company that allows an individual to run a location of their business. The 'franchisor' owns the overarching company, trademarks, and products, but gives the right to the franchisee to run the franchise location, in return for an agreed-upon fee.
What is a 'Franchisee'?
A franchisee is an individual who purchases the rights to use a company’s trademarked name and business model to do business. The franchisee purchases a franchise from the franchisor. The franchisee must follow certain rules and guidelines already established by the franchisor, and in most cases the franchisee must pay an ongoing franchise royalty fee to the franchisor.
What is a market?
A place forces and and supply operate, and where buyers and sellers interact to trade goods, services, or contracts or instruments, for money. The market for a particular item is made up of existing and potential customerswho need it and have the ability and willingness to pay for it.
Understanding Customer needs?
A business cannot survive without conducting ongoing efforts to better understand customer needs. To discover if your product or service is having a positive effect and creating customer loyalty, take time to ascertain your customer's emotional and material needs, then offer valuable incentives for remaining loyal to your company.
Quantitative research is about asking people for their opinions in a structured way so that you can produce hard facts and statistics to guide you. To get reliable statistical results, it’s important to survey people in fairly large numbers and to make sure they are a representative sample of your target market.
Qualitative research is about finding out not just what people think but why they think it. It’s about getting people to talk about their opinions so you can understand their motivations and feelings.
Market research can be either primary or secondary. Primary research is new research, carried out to answer specific issues or questions. It can involve questionnaires, surveys or interviews with individuals or small groups.
In business, the difference between the sale price and the production cost of a product is the unit profit. in economics, the sum of the unit profit, the unit depreciation cost, and the unit labor cost is the unit value added. Summing value added per unit over all units sold is total value added. Total value added is equivalent to revenue less outside purchases (of materials and services). Value added is a higher portion of revenue for integrated companies, e.g., manufacturing companies, and a lower portion of revenue for less integrated companies, e.g., retail companies.