Business Basics

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Introduction
A sign posted beside a road in Colorado states, “Failing to plan is planning to fail.” Playnix Toys posted the sign after successfully completing its 20th year in the toy business in Colorado. The company’s mission is to provide a superior selection of high-end toys for children of all ages. When the company began, it generated interest by using unique marketing strategies and promotions. The toy business has a lot of tough competition. Large chain stores such as Wal-Mart and Target offer toys at deep discount prices. Finding the right strategy to remain competitive is difficult in this industry, as FAO Schwarz discovered when it filed for bankruptcy after 143 years in the toy business.1 This plug-in introduces basic business fundamentals beginning with the three most common business structures—sole proprietorship, partnership, and corporation. It then focuses on the internal operations of a corporation including accounting, finance, human resources, sales, marketing, operations/production, and management information systems.

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LEARNING OUTCOMES
A. 1. Define the three common business forms. A. 2. List and describe the seven departments commonly found in most organizations. A. 3. Describe a transaction and its importance to the accounting department. A. 4. Identify the four primary financial statements used by most organizations. A. 5. Define the relationship between sales and marketing, along with a brief discussion of the marketing mix. A. 6. Define business process reengineering and explain how an organization can use it to transform its business.

Types of Business
Businesses come in all shapes and sizes and exist to sell products or perform services. Businesses make profits or incur losses. A profit occurs when businesses sell products or services for more than they cost to produce. A loss occurs when businesses