Bahan Kuliah : Prof. Dr. Otto Randa Payangan,S.

Part I: Organization of a Business

Planning A Business 1

Introduction to Business 3e
Jeff Madura
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 Learning Goals
• Identify key business stakeholders.
• Describe key business functions.

• Explain how to develop a business plan.

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 Organization of a Business

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 Business Decisions

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 Business Defined
A business is an enterprise that provides
products or services desired by
customers.

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 Introduction

• Business world can be seen as a complex

system
• Involves transforming resources into
products and services
• Must meet the needs of people in
exchange for profit
 A Business Plan

• Detailed description of the proposed

business
– Description of the product or service
– Types of customers the business would
attract
– Competition
– Facilities needed for production
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The role of business in society
• The description of a business emphasises four
different elements:
o Business involves human activities
o Business involves production
o Business involves exchange
o Business involves profit
 The role of business in society
• Business world under pressure to reconsider
role in the following:
o Social responsibility
o Affirmative action and equity
o Business ethics
o Consumerism
o Environmental damage
 Key Business Decisions
• Product
– What type of product should be produced?
• Production
– How should the product be produced?
• Promotion
– How should the product be promoted?
• Financing
– How should the company obtain funds to
finance the cost of producing the product?
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 Key Stakeholders
• Owners
– Entrepreneurs
– Co-owners
– Stockholders
• Creditors
• Employees
– Managers
• Suppliers
• Customers
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 Interaction among Owners, Employees,
Customers, Suppliers, and Creditors

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 Creating a Business Idea
• Identify a competitive advantage.
• Differentiate the product or service from
competitors.
• Determine necessary resources.

• Assess feasibility of the idea.

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 Key Functions of Business
• Management
• Marketing
• Finance
• Accounting
• Information Systems

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 How Business Decisions
Affect a Firm’s Earnings

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 Common Business Decisions
• Management Decisions
• Marketing Decisions

• Finance Decisions

• Human Resources Decisions

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 Developing a Business Plan
• Assess the Business Environment
– Economic environment
– Industry environment
– Global environment
• Develop Management Plan
– Organizational Structure
– Production
– Human Resources

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 Developing a Business Plan
• Marketing Plan
– Target Market
– Product Characteristics
– Pricing
– Distribution
– Promotion
• Financial Plan
– Financing
– Feasibility

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 Assessing a Business Plan
• Potential revenue
• Potential demand for product or service

• Potential expenses

• Profit potential

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