contributed by Cristian Tonna, Year 11
In Business Studies, one studies the basic knowledge that someone interested in opening up a business in the near future, needs to know. This knowledge will also help you in your ordinary day-to-day life. It can help you when you face circumstances such as taking a loan. You will be better informed! Some basic knowledge studied throughout this subject, involves the definition of what is a business activity?
A business activity is basically any kind of activity which provides goods or services at a profit. The main aim of a business is always to maximise profits.
So what are goods and services? Goods refers to anything that is tangible, meaning that it can be touched, and thus it can be passed on to someone else. Such goods can include a computer bought to be used by the workers. Whilst services are the contrary of goods, they aren’t tangible, and thus they cannot be passed on to someone else. Such services can include advertising.
Another question answered throughout the studying of this subject is what should be considered by someone opening up a business? There are four main important factors that must be considered. These are land, labour, capital and entrepreneur. Altough all of these factors play an important role, the last one is the main and most important, as without it none of the business activity can take place.
So what is the meaning of these factors? ‘Land’ refers to the geographical space where a business activity takes place, such as office premises. ‘Labour’ refers to the workers that do all of the job of the day-to-day running of the business. ‘Capital’ refers to the money and assets that a business uses in order to operate, such as machinery. And last but not least, the ‘entrepreneur’ is the person who takes all of the risks by investing his own money and assets. The reward that he receives is the profit.