1
BUSINESS STUDIES FORM ONE NOTES
INTRODUCTION TO BUSINESS STUDIES
Objectives: By the end of the topic, the learner should be able to:
i) Explain the meaning of Business studies
ii) Explain the importance of Business studies in society.
i) Business: Any activity that is carried out by an individual or an
organization concerning provision of goods and services with a view to
making profit.
ii) Business studies: Is the study/examination of the business activities in
society. These activities are related to the production of goods and
provision of services.
-It can also be defined as the study of activities that are carried out in
and around production, distribution and consumption of goods and
services.
iii) Goods: These are items that are tangible .i.e. they can be touched and
felt.
Activity 1: The students to list items in the classroom that can be touched
and felt
-Furniture, buildings, books, vehicles e.t.c
iv) Services: These are efforts or acts/actions or activities that may be sold
and are intangible (cannot be touched nor felt).
Activity 2: The students to list items that money is paid to get but they
cannot touch.
v) Production: Refers to the creation of goods and services or increasing
their usefulness through activities such as transporting them to where they are
required. People who are involved in production of goods and services are
referred to as producers.
Activity 3: Using the lists of goods and services above, the students to
name those involved in their production.
vi) Distribution: Refers to the movement of goods and services from
producers to the users. Some activities that take place as goods and services all
moved include transportation, storage, insurance, communication,
advertising.e.t.c
vii) Consumption: Refers to the act of using the goods or services produced
consumption is the ultimate goal of production. The persons who uses a good or
a service is referred to as a consumer.
Activity 4: The students to list the consumers of the goods and services
listed in activity (1) and (2) above.
, 2
Business studies as a subject is composed of topics drawn from various
disciplines such as:
a. Commerce
b. Accounting
c. Economics
d. Office practice
e. Entrepreneurship
Commerce
This is the study of trade and aids to trade. Trade refers to the exchange of goods
and services for other goods and services or money.
Aids to trade are human activities (services) that assist trade to take place.
Economics
This is the study of how human beings strive to satisfy their endless wants using
the available scarce resources.
Accounting
This refers to a systematic way of recording business activities which all used for
decision making.
Office practice
This refers to all activities that are carried out in an office e.g. communication,
filling, clerical work, reproduction of documents e.t.c
Entrepreneurship
This is the study of activities involved in the process of identifying a business
opportunity and acquiring the necessary resources to start and run a business.
The person who carries out these activities is refered to as an entrepreneur.
Importance of Business studies in society
Business studies is meant to prepare learners to function as informed consumers,
producers and workers in the society.
Some of the benefits of learning business studies include:
i. Assists the learners/members of the society to acquire knowledge and
awareness of business terminologies which are necessary when discussing
business issues such as profit and loss.
ii. Assists the individuals in appreciating the role of business in society/in
provision of goods and services.
iii. It enables the learners to acquire basic knowledge, skills and attitudes
necessary for the development of self and the nation by starting and
operating business.
iv. Equips the members of society with knowledge and skills necessary to start
and run a business comfortably.
, 3
v. Makes the members of society to appreciate the need for good business
management practices
vi. Assists individual to acquire self-discipline and positive attitude towards
work
vii. Equips individual with abilities to promote co-operation in society through
trade
viii. Enables the individual to understand the role of government in business
activities
ix. Equips individuals with abilities to understand the role of communication
and information technology in modern business management
x. Helps the individuals to develop positive attitudes towards the
environment
xi. Equips the individual with knowledge and skills required to evaluate
business performance
xii. It helps individual to develop various intellectual abilities such as inquiry,
critical thinking, analysis, interpretation, rational judgement, innovation and
creativity.
xiii. It enables learners to acquire skills for wise buying and selling.
xiv. It creates a firm foundation for further education and training in business
and other related fields.
xv. It enables one to understand and appreciate the basic economic issues that
affect the society such as increase in prices of goods and services.
BUSINESS AND ITS ENVIRONMENT
By the end of the topic, the learner should be able to:
a. Explain the meaning and purpose of a business
b. Identify various business activities
c. Identify various types of business environments
d. Explain how the various business environments influence a business.
Meaning of a business
This refers to any activity carried out by an individual or by an organization with
the aim of making a profit.
Profit is what the business earns above what it spends in providing goods and
services to the people who need them.
The term business also refers to firms or organizations that provide goods and
services to make a profit.
Purpose of business (Reasons for the existence of businesses)
, 4
Business is important in any society because it is not possible for people to
provide themselves with all what they need without direct or indirect aid from
others. Some of the main reasons why businesses exist are:
i) To provide goods and services-Businesses exist to satisfy the needs
and wants of buyers by providing them with goods and services. Buyers
include individual consumers, other businesses and the government.
ii) To create employment-Businesses provide job opportunities through
which members of society can earn money, which can be used to buy
goods and services for the satisfaction of their needs.
iii) To earn profit-Profit is the primary goal of carrying out business
operations. It is earned by the people who put their resources and effort
in business
iv) As an outlet of new innovation-Some businesses provide unique
goods and services which may not be existing in society e.g. plastic
fencing poles that are now replacing wooden poles.
v) To be as own boss-Some people run businesses so as to be in full
control of the operations and make all the decisions regarding the
business without need of reference to people.
vi) To utilize extra resources-Some people go into business to make use
of money or property which is not being put to profitably use at a given
time.
vii) To offer special services-Some businesses provide services that raise
the living standard of people e.g. government enterprises that provide
public utilities such as health care and water.
viii) To utilize spare time-Some people run businesses in order to make
use of extra time at their disposal and in the process make some extra
money. A large number of formally employed people have small
business which they run during their free time in order to earn more
money.
NB: Whatever purpose a business fulfills, it has to earn a reasonable return on
the invested money to survive.
TYPES OF BUSINESS ACTIVITIES
People carry out different business activities in order to earn income.
Business activities are activities which involve the provision of goods or
services with an aim of earning a profit.
Activities done without the intention of making profit are referred to as non-
business activities. Business activities may be grouped into the following
seven categories:
BUSINESS STUDIES FORM ONE NOTES
INTRODUCTION TO BUSINESS STUDIES
Objectives: By the end of the topic, the learner should be able to:
i) Explain the meaning of Business studies
ii) Explain the importance of Business studies in society.
i) Business: Any activity that is carried out by an individual or an
organization concerning provision of goods and services with a view to
making profit.
ii) Business studies: Is the study/examination of the business activities in
society. These activities are related to the production of goods and
provision of services.
-It can also be defined as the study of activities that are carried out in
and around production, distribution and consumption of goods and
services.
iii) Goods: These are items that are tangible .i.e. they can be touched and
felt.
Activity 1: The students to list items in the classroom that can be touched
and felt
-Furniture, buildings, books, vehicles e.t.c
iv) Services: These are efforts or acts/actions or activities that may be sold
and are intangible (cannot be touched nor felt).
Activity 2: The students to list items that money is paid to get but they
cannot touch.
v) Production: Refers to the creation of goods and services or increasing
their usefulness through activities such as transporting them to where they are
required. People who are involved in production of goods and services are
referred to as producers.
Activity 3: Using the lists of goods and services above, the students to
name those involved in their production.
vi) Distribution: Refers to the movement of goods and services from
producers to the users. Some activities that take place as goods and services all
moved include transportation, storage, insurance, communication,
advertising.e.t.c
vii) Consumption: Refers to the act of using the goods or services produced
consumption is the ultimate goal of production. The persons who uses a good or
a service is referred to as a consumer.
Activity 4: The students to list the consumers of the goods and services
listed in activity (1) and (2) above.
, 2
Business studies as a subject is composed of topics drawn from various
disciplines such as:
a. Commerce
b. Accounting
c. Economics
d. Office practice
e. Entrepreneurship
Commerce
This is the study of trade and aids to trade. Trade refers to the exchange of goods
and services for other goods and services or money.
Aids to trade are human activities (services) that assist trade to take place.
Economics
This is the study of how human beings strive to satisfy their endless wants using
the available scarce resources.
Accounting
This refers to a systematic way of recording business activities which all used for
decision making.
Office practice
This refers to all activities that are carried out in an office e.g. communication,
filling, clerical work, reproduction of documents e.t.c
Entrepreneurship
This is the study of activities involved in the process of identifying a business
opportunity and acquiring the necessary resources to start and run a business.
The person who carries out these activities is refered to as an entrepreneur.
Importance of Business studies in society
Business studies is meant to prepare learners to function as informed consumers,
producers and workers in the society.
Some of the benefits of learning business studies include:
i. Assists the learners/members of the society to acquire knowledge and
awareness of business terminologies which are necessary when discussing
business issues such as profit and loss.
ii. Assists the individuals in appreciating the role of business in society/in
provision of goods and services.
iii. It enables the learners to acquire basic knowledge, skills and attitudes
necessary for the development of self and the nation by starting and
operating business.
iv. Equips the members of society with knowledge and skills necessary to start
and run a business comfortably.
, 3
v. Makes the members of society to appreciate the need for good business
management practices
vi. Assists individual to acquire self-discipline and positive attitude towards
work
vii. Equips individual with abilities to promote co-operation in society through
trade
viii. Enables the individual to understand the role of government in business
activities
ix. Equips individuals with abilities to understand the role of communication
and information technology in modern business management
x. Helps the individuals to develop positive attitudes towards the
environment
xi. Equips the individual with knowledge and skills required to evaluate
business performance
xii. It helps individual to develop various intellectual abilities such as inquiry,
critical thinking, analysis, interpretation, rational judgement, innovation and
creativity.
xiii. It enables learners to acquire skills for wise buying and selling.
xiv. It creates a firm foundation for further education and training in business
and other related fields.
xv. It enables one to understand and appreciate the basic economic issues that
affect the society such as increase in prices of goods and services.
BUSINESS AND ITS ENVIRONMENT
By the end of the topic, the learner should be able to:
a. Explain the meaning and purpose of a business
b. Identify various business activities
c. Identify various types of business environments
d. Explain how the various business environments influence a business.
Meaning of a business
This refers to any activity carried out by an individual or by an organization with
the aim of making a profit.
Profit is what the business earns above what it spends in providing goods and
services to the people who need them.
The term business also refers to firms or organizations that provide goods and
services to make a profit.
Purpose of business (Reasons for the existence of businesses)
, 4
Business is important in any society because it is not possible for people to
provide themselves with all what they need without direct or indirect aid from
others. Some of the main reasons why businesses exist are:
i) To provide goods and services-Businesses exist to satisfy the needs
and wants of buyers by providing them with goods and services. Buyers
include individual consumers, other businesses and the government.
ii) To create employment-Businesses provide job opportunities through
which members of society can earn money, which can be used to buy
goods and services for the satisfaction of their needs.
iii) To earn profit-Profit is the primary goal of carrying out business
operations. It is earned by the people who put their resources and effort
in business
iv) As an outlet of new innovation-Some businesses provide unique
goods and services which may not be existing in society e.g. plastic
fencing poles that are now replacing wooden poles.
v) To be as own boss-Some people run businesses so as to be in full
control of the operations and make all the decisions regarding the
business without need of reference to people.
vi) To utilize extra resources-Some people go into business to make use
of money or property which is not being put to profitably use at a given
time.
vii) To offer special services-Some businesses provide services that raise
the living standard of people e.g. government enterprises that provide
public utilities such as health care and water.
viii) To utilize spare time-Some people run businesses in order to make
use of extra time at their disposal and in the process make some extra
money. A large number of formally employed people have small
business which they run during their free time in order to earn more
money.
NB: Whatever purpose a business fulfills, it has to earn a reasonable return on
the invested money to survive.
TYPES OF BUSINESS ACTIVITIES
People carry out different business activities in order to earn income.
Business activities are activities which involve the provision of goods or
services with an aim of earning a profit.
Activities done without the intention of making profit are referred to as non-
business activities. Business activities may be grouped into the following
seven categories:
