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Definition: business a person’s regular occupation, profession or tradethe practice of making one’s living by engaging in commercetrade considered in terms of profit and volume
Definition: organization the action of organizing somethingan organized body of people with a particular purpose, especially a business, government department or charity
What do the words ‘business’ and ‘organization’ mean?
A business is a specific type of organization which exists to sell products (goods or services) to customers.
Businesses aim to supply customers with the products they want so that they can make a profit. Unfortunately, some businesses do not manage to make a profit, meaning that they have failed to achieve their aims.
Customers can be private individuals, like ourselves, or other businesses.
The photo shows a house for sale. Is the estate agent selling it selling goods or services?
Private sector businesses are owned by private companies or individuals. They are run to make a profit.
For example, the NHS is operated to benefit everyone in the UK, but a council nursery is run solely for young children and their parents.
Public sector organizations are owned by central government or regional authorities. They can be operated for the benefit of everyone or for one particular group.
Every business exists for a purpose. It may sell goods or services. Mobile phone company Vodafone sells network coverage (services) and mobile phones (goods).
Therefore, all businesses must have aims and objectives that identify what they wish to achieve.
Businesses must make a profit to exist. They need to know what they want to do and how they want to do it in order to attract and keep customers.
Public sector organizations are owned or controlled by the government or regional authorities.
Some industries, such as gas, postal, electricity, telephone and railway, used to be in the public sector but were privatized in order to be more efficient.
Can you think of five public sector organizations?
They are not businesses because they are not seeking a profit; most of their money comes from funds that are acquired through taxes.
However, public sector organizations often have similar aims to businesses, because they also need to run efficiently.
Bonnie’s Ice Creams is a small business run and owned by Bonnie Tate.
Bonnie’s aim is to improve her profits. She has set herself the SMART objective of increasing her sales by 15% over the next three months to help her to achieve her aim.
Are there any reasons why Bonnie might be unable to meet her objective?
She loves being her own boss, but she wants to make some more money.
If she regularly measures her progress, Bonnie can correct any mistakes she may be making; she can also review her objective and make changes to it if necessary.
How can Bonnie measure her performance to make sure she completes her objective?
Bonnie should measure her sales daily, weekly and monthly to check that she is meeting her objective.