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1.1 Introduction to business management - Coggle Diagram

- - - - Primary Sector refers to the extraction or production of raw materials and includes agriculture, fishing, forestry, mining, and drilling – the taking of raw materials from the earth.
    - - Secondary sector refers to manufacturing and processing, where raw materials are converted into products for sale. Construction is also included in the secondary sector.
    - - Tertiary sector refers to any business that sells a service. The tertiary sector includes retail stores, as well as education, healthcare, travel and transportation, and accounting and legal services, to name a few
    - - Quaternary sector is a relatively new concept: the service sector that focuses on knowledge. As a service activity, the quaternary sector is arguably really part of the tertiary sector. However, in the last fifty years, computer use has grown explosively and, with it, so too has the bulk flow of information. Businesses have emerged that specialise in collecting, repackaging, and selling or providing information. The quaternary sector also includes businesses that provide web-based services and many new kinds of media (or traditionally named media that have transformed themselves with new IT technologies).
- - - - Prepare a business plan. A business plan is a roadmap that lays out how the business will get started. We will study the elements of a business plan later in this section.
      - Decide on a legal structure. The legal structure of the business will determine its ownership, and has important repercussions in terms of taxes, liability, and finances. We will study the different forms of organisational structure in Subtopic 1.2. Although many entrepreneurs will start their companies alone as sole traders, others will start their businesses with partners who share ownership of the company.
      - Register the business and take care of administrative tasks. In almost all countries, businesses must be registered with the government. If you were to set up a business in the UK, for example, this site provides information on the steps necessary to satisfy regulations related to business creation. In general, the steps involve: formally registering the company, preparing statutes that describe how it is to be run, filing with the tax authorities, and applying for any necessary licences. In many countries, a licence is required for many economic activities from cutting hair to providing financial advice.
      - Find a locale. With improvements in technology and the development of the service economy, many entrepreneurs are able to begin their businesses at home. Others might make use of start-up 'incubators' that are popping up, often sponsored by governments, which provide low-cost office space to new businesses. Many of these facilities encourage interactions among young businesses, and may provide basic services, like help with administration.
      - Hire employees if necessary. Many entrepreneurs work alone, at least in the beginning. Others will need to hire staff to get started.
      - Most entrepreneurs contribute their personal savings to get their business off the ground, but many will need additional sources of funds. Finding needed financing is an important step in starting a business. We will learn more about financing in Topic 3, Finance and accounts.
  - - - Business idea.
      - Type of ownership – organising the business.
      - How are you going to produce the product? What investments are needed?
      - How are you going to finance the equipment and other start-up costs?
      - Do you need to hire employees? What sort of skills and education are required?
      - Who will be your customers? Are there competitors?
    - - Production: How are you going to produce the product? What investments are needed?
        
        The production method you plan to use relates to how the product will actually be made. Will it be made by hand or using expensive equipment? The investments needed to start or maintain a business are called 'capital investments'. The term investment implies that an asset will be used by the business for at least a year. In starting up a website design company, the only asset required might be a com puter. To open a bakery the investment will likely be a bit more expensive, and include all the kitchen equipment and furnishings needed to set up the shop.
      - Human resources: Can you do it alone?
        
        New entrepreneurs must ask themselves whether they have the time and the ability to manage all aspects of a new business. If not, they will need help, either from a partner, employees, or by getting outside help
      - Marketing: Who will your customers be?
        
        This section describes whom you would like to target in terms of customers. Will you be selling to consumers or to other businesses? If you are selling to consumers, what demographic group are you aiming to sell to; children, teenagers, young adults, adults, or seniors? Are you aiming to sell in your town, or nationwide, or even worldwide?
      - Finance: How are you going to finance the equipment, and other start-up costs?
        
        The amount of financing needed to start a business depends upon two factors: the capital investment described above, and secondly, the need for something called working capital. Working capital is the amount of funds needed to run the business’s day-to-day operations and includes the cost of inventory and supplies,
      - What is your product or service?
        
        The first question to be answered is what will be the product or service sold by the company. This is a good place to describe what is unique about the product or service proposed, and why there is a potential market.