1.12 Defining a Business

1.	A profit-seeking movement that offers goods and services that persuade customer’s need

2.	Profit vs. Nonprofit Organizations

		Profit organizations receive the difference between production and marketing costs, and product price – profit motive
		Nonprofit organizations provide goods and services, breaking even in the process; however, they still must run effectively and efficiently to continue to serve their customers

3.	Goods-Producing Businesses Versus Service Businesses. Goods-producing businesses produce tangible goods

a.

Mean of production includes:

			manufacturing
			construction
			mining
			agriculture

1.12 Defining a Business

b.

Most goods-producing businesses are generally Capital-intensive – require lots of capital or equipment to get started

4.	Service-producing businesses provide intangible products such as finance, insurance, transportation, etc.

	a.	Most service businesses are labor-intensive businesses
	b.	Labor intensive – rely mainly on worker skill and knowledge

5.	Line between goods-producing and service businesses is often blurry.