Introduction to Business and Economics. Bettina Fuhrmann

Businesses can be profit-oriented or not-for-profit

       3.4 Businesses come “in all sizes”: large and small

       3.5 Businesses may be local, national or international

       3.6 Businesses operate in an environment – stakeholders are important

       4. Forms of business ownership and sources of finance

       4.1 Sole proprietorship / sole traders

       4.2 Partnership

       4.3 Corporations

       4.4 Summary: Overview of forms of business ownership

       4.5 Overview of sources of finance

       4.6 The choice of the source of finance

       5. Marketing

       5.1 What a product is

       5.2 Objectives of marketing

       5.3 Product orientation versus market orientation

       5.4 The need for more responsibility and sustainability

       5.5 Market research

       5.6 Market segmentation and targeting strategies

       5.7 The marketing mix

       6. Accounting – keeping record of business transactions

       6.1 What a balance sheet is

       6.2 Other components of the financial statement of a business

       6.3 What can be learnt from reading a balance sheet and an income statement

       6.4 Types of accounting

       6.5 Analysis of financial statements

       7. Personnel management – because people matter

       7.1 People are crucial for a business – the right people even more so

       7.2 Elements of personnel management

       7.3 Motivating people

       8. Writing a business plan

       8.1 What a business plan is

       8.2 Why and for whom a business plan is written

       8.3 The structure of a business plan

       8.4 Why businesses fail

       8.5 Why businesses succeed

       9. Case study – applying the knowledge of business and economic concepts

       9.1 DO & CO, an international business that was started in Austria

       9.2 Solutions to the assignments for revision and analysis

       10. Appendix

       10.1 Suggested readings

       10.2 Index

       1 Introduction to business matters

      [6]Over the past few years Tina has noticed that quite a lot of people buy new computers even though their old ones are still working. At the same time other people are perfectly happy with a used computer as long as it works. They do not need to have the latest model, they are just interested in having access to the Internet and the computer programs that they want to use. What is more, many people need help to get started with their new computer, and some also need help later on with new releases of software, data storage and security issues.

      At school and also later during their university studies, Tina and her former classmate Steve specialised in computer science and in business. They have always tried to help their families and friends with any computer issues. And as more and more friends of their friends as well as neighbours and acquaintances of their families have asked for help, they have considered starting a business that offers a wide range of professional computer services.

      A business is an entity that offers goods and/or services to customers. Businesses do not produce primarily for their own needs or work exclusively for their families’ and friends’ needs, but for someone else: for their customers. Businesses usually charge a price for their goods and services so that they get something in return. Exchanging goods and services against money or other means of payment (or exchange) is a main characteristic of the economy.

      Tina and Steve consider the following idea: buying used computers at a low price, checking and repairing them (if necessary), and adjusting/modifying them to the needs and wishes of their customers. By doing so, Tina and Steve are able to offer ready-to-use computers at an affordable price and create value for their customers.

      They also consider offering additional services such as setting up the computer at the user’s home, installing software, connecting the computer to the Internet, explaining how to use the computer etc. Another idea that comes to their minds is offering online help for problems that might occur. Customers facing a problem with their computer would be supported within 24 hours. Tina and Steve are even considering developing tailor-made software for their customers. With so many ideas, Tina and Steve are convinced that they can start a profitable business. That is exactly what they want to do as they need to earn money to make a living.

      [7]Alternatively, Tina and Steve could easily find jobs that they are interested in because they both have a profound knowledge of business and computer science. During their studies both of them worked for AT&S, the Austrian company Austria Technologie & Systemtechnik AG, for a couple of months and they liked that very much. AT&S (https://ats.net/de/) is a manufacturer of high-end printed circuit boards and of new technologies such as IC substrates, mSAP and advanced packaging. It is located in Styria with some production sites in Asia and ranks among the globally leading companies in that field. In Europe, AT&S is the market leader, with revenue of about €990 million and almost 10,000 employees.

      However, at the moment, they both prefer the idea of being self-employed, generating their own ideas, creating something new and being their own bosses. They prefer to become entrepreneurs who have developed an idea, solve problems and create value for their customers, take a risk and make sensible economic decisions.

      They consider further aspects about founding their business. They are ready to work long hours and invest their savings in the business. They have found a business location that they consider appropriate, where they could rent two rooms in an office building for meeting with customers, working and developing software, storing the computers and other equipment. Additionally, they would need a car or – even better – a small van that they would use for transporting the computers between their customers and their office. Tina’s car, which she does not really use very often, could be used for that purpose, at least for the first few months. Yet, they know from what they have learned during their business studies that there are a few more questions to be considered. The following chapters cover the basic knowledge that is needed for answering these questions.

       Important questions to be considered before setting up a business