In this unit you will learn about the production and exchange of goods and services. You will learn how these activities have changed over time, following the development of money as a generally accepted medium of exchange. Money overcame the problems of earlier forms of exchange, and it has supported the expansion of trade and modern business activity. You will learn how the growth of business activity has required the development of other instruments, to make the exchange of goods and services and money quicker and  ore secure. You will also develop an understanding about different types of private sector and public sector business organisations and how they differ in the ways they are owned, financed and controlled. By the end of this unit you will be able to identify the documents required to register different types of business, and appreciate the impact various factors can have on a business as it grows and changes. Setting up a business can be difficult, but coping with business growth presents another set of challenges. Unit 1 will set the stage for understanding the chapters that follow in this textbook. It explores the key concepts and ideas that are important in order to make sense of how businesses function, regionally and internationally.

Business
All activities related to the production and distribution of goods and services, in order to satisfy the needs and wants of consumers.

An economy
All the activities involved in the production, exchange and consumption of goods and services within a specific area or nation state. The size of an economy is therefore measured by the total value of all the goods and services it produces and exchanges each period.

Business stakeholder
Any individual, institution, group or organization that has a vested interest in the conduct of a business and how well it performs.

1. Provide a definition for the term ‘business’’.
2. Identify the various stakeholders who may be interested in the performance of a business. Choose any four of those which you have listed, and briefly explain why they are interested in how well a business performs.

1. How would you define the concept of ‘business’?
Business may be described as all the activities in the economy concerned with the production and distribution of goods and services, in order to satisfy the needs and wants of consumers. Generally, a business can be defined as an organisation that supplies goods and  services in exchange for money, or sometimes for items of equal value. Businesses include a range of different organisational forms, from a small owner-operated business (such as a family restaurant) to large multi-national companies such as Nestlé or Coca-Cola.
Every business requires financial capital to operate, and customers willing and able to buy its products, so the process of exchange generates sales revenues and profits. However, not all organizations aim only to maximize their profits. Some may pursue social and environmental objectives.

2. Many young people dream of owning huge companies someday. Many imagine a sole trader to be too small and, therefore, very unprofitable. How would you advise them?
If you have a good business idea and you like the idea of being your own boss then there are a number of different types of business structures that you can choose from. The legal structure of the business is quite important, as different types of businesses are subject to very different regulations and the wrong choice now could have costly consequences in the future. Take Massy Stores, a company begun in 1950 by Earnest Canning. The company evolved over time to become one of the leading modern Caribbean supermarkets.
There are numerous companies that enter the market as a small business such as a sole trader or partnership and some of these enterprises can grow into larger multi-national corporations like Massy.

3. Who are the stakeholders in a business? Why should they be interested in how well a business performs?
A stakeholder is any person or group of people with an interest in the success of a business. For example, the stakeholders of Caribbean Airlines (CAL) include its shareholders (owners), the local community, the government, employees, managers, customers and other people and organizations that may be directly affected by the way the business is run. Businesses have different rights and responsibilities towards their stakeholders. Conflicts can arise when the interests of one stakeholder group oppose those of another stakeholder group. For example, when the pilots at CAL were unhappy about salary issues and took industrial action to force a decision.