Role of business: Nature of business Flashcards
Business - profit
this is the return or reward that business owners receive for producing products that consumers need and want.
Business - employment
Businesses provide employment to people in their local community.
Business - income
Businesses provide income to business owners/shareholders and employees.
Business - choice
Consumers have freedom of choice and the opportunity to purchase products at competitive prices.
Business - innovation
Through research and development, existing products are improved and new products are created.
Business - quality of life
Businesses offer a vast array of products that improve our standard if living.
Business - entrepreneurship and risk
Businesses provide individuals with the opportunity to turn their ideas and passions into a livelihood.
Business - wealth
Business activity results in higher economic growth and wealth.
Business - relationship between revenue, operating expenses and profit.
The total amount of money or income received by the sales of goods or services directly related to the company’s primary operations is revenue. Then using revenue businesses pay for the operating expenses to produce goods and services (an example of this is rent, equipment, wages or machinery). The revenue left over after business expenses have been payed for is profit, and this is kept by the business.
