Slides for N5 Business Management

1. 1.1 Business Activity
N5 Business Management

2. What is a Business?

A business is an organisation that
exists to satisfy needs and wants.

3. Some Key Terms
Customer
 Consumer
 Supplier
 Turnover
 Costs
 Profit


4. Needs and Wants

A Need is a basic thing
humans have to have in
order to survive. I.e.
Food, water, shelter and
clothes are all needs.

A Want is something extra
we would like to have. They
can be luxuries or time
saving devices.
Cars, mobile
phones, computers and
CDs are all wants

5. Goods and Services




A Good is something you
can touch and feel.
Goods can be non-durable,
durable or industrial
A Service is provided by
someone else. A service is
non-physical.
Hairdryer is a good. A
Hairdresser is a service.

6. Quick Quiz

7. TASK

Question Bank

1-7

8. Production Stages
INPUTS
PROCESS
OUTPUT

9. Factors of Production

Land – all natural resources used in
production

Labour – all people used in production

Capital - all items used to make other
things in production

Enterprise – the art of bringing
together the other factors of
production and being successful

10. TASK

Question Bank

8-20

11. ICT Task

Create a poster outlining Inputs,
Process & Outputs of a product you like

Include suitable images & text

12. Why do businesses exist?

To satisfy customer needs and wants

To satisfy consumption

13. Balancing Costs and Benefits

A new airport is to be built near
Blantyre. David Livingstone
International Airport!

Do you think the people who live in
Hamilton, Motherwell & East Kilbride
would be happy?

Think of some good points and bad
points about this development

14. Key Terms

Social Costs – bad or negative effects
businesses have on the community

Social Benefits - good or positive effects
businesses have on the community

Economic Costs – the cost of the
business alternative given up

Economic Benefits – the positive, long
term changes to an area

15. Social costs and benefits





Costs
Air/noise/water
pollution
Traffic congestion
Lifestyle change
Local services
unable to cope





Benefits
Happier customers
Creation of jobs by
business
Contribution to
local community
Creation of jobs
within other local
businesses

16. Economic costs and benefits





Costs
Hospital v leisure
centre
Shopping centre v
Football stadium
Pub v Fast Food
restaurant
Packet of crisps v
chocolate bar





Benefits
People employed
Wages received
Rise in standard of
living
Boost to local firms

17. TASK

Question Bank

21-34

18. The Business Cycle

19. TASK

Question Bank

35-38

20. Customer Satisfaction

Customers are vital for a business as
they buy the goods and services.

Firms try to make customers happy
by:
Having a quality product
 Effective employees
 After sales service (including
warranties)


21. Customer Satisfaction

Firms may also have:
Customer Care Policy
 Customer Complaints Process


23. TASK

Question Bank

39-43
Extension Task:
 Create Organisation Charts for:
 The School
 A Local Business of Your Choice


24. Are all Businesses the same?

Organisations differ due to many
characteristics.
Business Size
 Business Objectives
 Type of Ownership
 Product/Service


26. Mission Statements

An organisation usually
outlines it vision or values in a
mission statement.

For example, Manchester
United – the world’s richest
sports team, valued at £2
billion – has a simple one:

“To be the best football club in
the world on and off the
pitch.”

27. TASK

Question Bank

44-45

28. Business Size
Small Business Medium-Sized
Business
Large Business
Owned by sole
trader or
partnership
Owned by a
Owned by
group of people shareholders;
run by directors
Sells goods
locally
Reaches locally
and/or
nationally
Employees: <=
50
Employees: 50- Employees: 250
250
+
Sells locally,
nationally and
internationally

29. TASK

Question Bank

44-49

30. Sectors of Economy
 Private
 Public
 Third
Sector
Sector
Sector

31. Private Sector

Businesses driven by profit.

That profit only benefits the owners
and investors.

Financed by private money from
shareholders and bank loans

32. Private Sector Examples
 Sole Trader
 Partnership
 Private Limited
Company
Ltd & Plc

33. TASK

Question Bank

50-58

34. Public Sector

Provide goods and services for the benefit
of the community

Run by the Government.

Public money from taxes

35. Public Sector Examples
 Devolved Services
 Local Services

36. TASK

Question Bank

59-89

37. Third Sector

Not driven by profit but by need to
help parts of the community

Money from donations and gifts

Can be a Social Enterprise

38. Third Sector Examples
Charity
Social Enterprise
Local Sports Club

39. TASK

Question Bank

90-101

40. ICT Task

Create a PowerPoint presentation
comparing an organisation from each of the
3 different sectors of ownership:

Private (examples, advantages &
disadvantages)



Public (examples, advantages &
disadvantages)
Third (Voluntary) (examples, advantages &
disadvantages)
Include suitable images & text

41. Business Objectives
Survival
Profit Maximisation
Growth
Provide a Service
Customer Service
Sales Maximisation
Social Responsibility

42. TASK

Question Bank

102-109

43. Sectors of Industry

Primary Sector

Secondary Sector

Tertiary Sector

45. Primary Sector

This covers raw
materials which are
straight from land, sea
and air

Mining
Farming
Fishing
Oil and gas
Forestry





46. Secondary Sector

This uses the raw
materials and turns
them into finished
goods
Car manufacturing
 Engineering
 Shipbuilding
 Electronics


47. Tertiary Sector








This covers all services:
Insurance
Education
Fire Service
Health Service
Leisure Industry
Travel & Tourism
Distribution

48. Production Chain

Production is the transformation of raw
materials into the finished product

IPO or Input – Process - Output
INPUTS
PROCESS
OUTPUT

49. Creating Wealth

Wealth is created by adding value to
each stage of the production process

Selling Price = Cost of materials +
Value

50. TASK

Question Bank

110-115