Introduction to Business

REFLECTIVE ESSAY

Introduction to business was one of the most interesting classes I have attended in this semester. Not only was it because we always had lively classes with fun activities but also because we learned a lot about business in general. We had topics such as "Starting a Small Business", "Business Ethics and Social Responsibility", "Managing a Business", "Managing Employees" and "Developing Marketing Skills". However, the topic I favored the most was "Business Ethics and Social Responsibility".

This is a topic about the right behavior and attitude that people should imply when dealing in a business as well as the businesses’ role of being socially responsible. To me, this is a very important topic for the future in order to have a smooth business or good relation with other business companies. Besides that, I also like this topic because it indirectly teaches us about our moral values in the society. Aside from this topic, “Business Ethics and Social Responsibility” being my favourite topic, I also think it is the most applicable to my everyday life and future studies due to the reason mentioned earlier. We have had plenty of tutorial sheets and activities throughout our classes and it had given me a positive affect in a way that it showed me the importance of acknowledging some values in business in my every day life. Beside that, it also teaches me how to cooperate in groups due to the fact that most of our activities required us to be in a group especially our final project where we had to basically run a business together in a group, for charity at campus itself.

In a nutshell, I have gained plenty of positive outcomes from learning this subject and it had thought me a lot of valuable lessons as well.

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The Slides For ASSIGNMENT 1

One of the pictures of one of the activity in Business Class

Pictures from Final Project 

Tutorial Questions 

Intro to Business Exercise 2.0

1. What is a niche market? Can you give 2 examples (other than from the notes) of a niche market? Why would a business want to target a niche market?

Niche market refers to very specific or unique segment of a market, such as tattoo shop, and internet business. Small business are less bureaucratic this means that they are able to respon quickly to changes in the market.

2. What are some of the reasons that motivate people to start their own business? If you were to start a business, what would be your main reason? Discuss.

Some people like the idea of being self-employed, instead of working for others. Some people want to fulfill their personal dream. Some people believe that they have a product with good profit potential and want to take advantage of the opportunity. The main reason for me start a business is the idea of being self-employed.

3. What is limited liability? Is this an advantage or a disadvantage to the business owner? How (i.e. illustrate with an example)?

Limited liability is when an owner is not personally responsible for the debts of his company. It is an advantage to the business owner because if the compant goes bankrupt, the owners lose their invested capital only and do not need to come up with more money to pay off the company’s debts.

4. What is a franchise? Why would the parent company of a franchise choose to sell licenses to franchisees instead of expanding their own chain of stores? Also, provide 2 examples of a franchise.

A franchise is a business operating under licenses issued by parent companies. To obtain the license, a franchise needs to pay anywhere $200k to several million to the parent compant. The franchise must also a percentage of their annual revenue earned to the parent. Example of a franchise is KFC and MCD.

5. Your family has owned a business as a private company for the last 20 years. Recently your father, the CEO and chairman, is rushing to take the company public, but you sensed that he has not thought through this decision properly. As his adviser, what reasons would you give to persuade to stay as a private company?

There are more risks; and more preparation and hard work are required to make it work. Therefore, he should stay as a private compny to avoid any risks that are bound to happen.

6. How can internet help a recently-started small business?

If one starts the business online, we do not need to spend more for store and maintenance. Besides that, one could also widen their connection with other companies.

7. If you are a banker and, Gabriel, a potential business owner wants to apply for a loan for starting a business, under which circumstances would you be more likely to lend – a) he wants to buy an existing business or b) he wants to start a brand new business? Why?

I would more likely to loan if he wants to buy an existing business, because if the existing business is already successful, then it would be less risky than starting a business from scratch.

8. Discuss (any) 2 pros and 2 cons of a partnership.

The pro of a partnership is easier to get capital due to more owners. As a result, banks are also more willing to lend monet and the legal paperwork is simple and low cost. On the other hand, the cons of a partnership is unlimited liabilities, all owners are personally responsible for the business’ debts and arguments may arise if the owners do not share the same business objectives.

9. What are shares? Where are shares traded in Malaysia? How is the price of a company’s share determined in a share market?

A unit of ownership that represents an equal proportion of a company’s capital. It entitles its holder to an equal claim on the company’s profits and an equal obligation for the company’s debts and losses.

Intro to Business Exercise 7.0

1. What is accounting? Explain. 

Accounting is a tool that can do 3 different things for a business. The three different things are communication tool, helping its readers making business decisions and discharge the accountabilities of workers.

2. Lejun is the owner of an architectural firm but he has no rudimentary knowledge in accounting (he has an accountant who looks after everything for him). Is this acceptable? Why or why not? 

Nope, it is not acceptable because an owner also has to have a slight knowledge in accounting to read all the accounting reports that are going to be send to him as well as tracking workers who is not honest and not doing the job properly.

3. What information can you obtain from a Profit and Loss Statement? How can you use this report to assist you in making business decisions (use an example)? What is the other name of P&L statement? 

Reports the profit or loss generated by a business are the information you can obtain from a Profit and Loss Statement.  The example in making business decision should the business introduce new products to boost the profit? Or cut expenses instead? And the other name of P&L statement is “Income Statement”

4. What is a Balance Sheet? Also explain the 3 main items reported in it (with suitable examples). What is the other name of balance sheet? 

Balance Sheet is reports what a business owns and owes in a particular day. The other name of Balance Sheet is Statement of Financial Situation.The three main items reported in it is Assets, Liabilities and Owner’s Equity.

5.    What is the accounting equation (formula)? Shi Yi started her business on 1^st January 2011 with $1.5m of her own money and $0.8m of bank loan. Write out the equation for her business.

  

Assets= Liabilities + Owner's Equity

$2.3 = $0.8 + $1.5

6. Continuing from question 5, what if Shi Yi repaid half of the bank loan 2 months later? How will her business’ accounting equation look like? Lastly, at the end of 2011, her business makes 0.4m of profit. Again, how will her accounting equation look like? 

$6.2= $2.7 + $3.5

7. Yin Jou wants to borrow $150,000 from Public Bank. She currently has $250,000 of assets (car, shares and cash) and liabilities (e.g. personal loans) of $226,500.  Based on this information, would you (as a loan officer) approve the loan? Why or why not? 

No because she does not have enough money to pay all her loans

8. Herman runs a roti canai stall in Subang. His monthly rent and utility expenses are $2700. He sells each roti canai for $1.50 and it costs him $0.65 to make each. Calculate his break-even point. Why is this information important to him? 

In order to pay the rent and utility expenses for one month, he has to sell about 3176 roti canai. This information is important because it will influence his decision to continue running the business as is, add more items to the shop or stop the shop immediately.