SUPPLY AND DEMAND

● Consumers set demand

● Producers set supply
● Were two lines on a graph for price, demand, and quantity cross is the “sweet spot”, aka
Market Price
● Inventory is a liability
● Cars are a depreciating asset
● Demand curve illustrates a relationship between the demand by the consumer and the
price of the product
● Determining Price
○ Factors influencing demand
○ Factors influencing the supply
○ Environment
○ Determining market price
● Determining Supply
○ Employees
○ Competition
○ Shipping
○ Environment
● Chapter 2: Economic Activity
● Key terms:
○ Gross domestic product (gdp)
○ GDP per capita
○ Unemployment rate
○ Productivity
○ Personal income
○ Retail sales
● GDP is…
○ Total exports - total imports
○ The financial health of an economy
○ If GDP increases (annually), then the Country is growing in market
○ If GDP decreases (annually), then the Country is retracting in market
○ Tied into national debt
○ GDP can sharply increase if a new market opens
● GDP per capita:
○ GDP divided by total population
○ An increase in GDP per capita = growth in economy
○ Consumption and employment contribute to GDP per capita
○ A decrease in employment means that GDP will go down and retraction in
Economy
○ Average income per household AND per individual
● Unemployment
○ The unemployment rate in the work force is the portion of people who are not
working
 ○ Retired, 100% disability, and minors are not included in workforce (18+ is
included)
○ Productivity = production output in relation to a unit of input
○ Measure the total output of employees
○ Input could be # of orders of something
○ If wages increase faster than productivity
● Don’t raise wages TOO fast, or profit will decline
○ Inflation usually is followed by deflation
○ The more prices INFLATE, the dollar is less valuable
● A trough would be the best time to invest in a stock, because as deflation is going to
increase during the recovery and expansion periods, which means that your money will
MAJORLY rise in value along the road to the peak
● Take chances. Make mistakes. Just DO IT. Do the Dew.
● Wait for stocks to hit a “Sweet Spot”
● Consumer Price Index
○ Measures inflation in TONS of categories
○ Strong correlation between types of items being deflated/inflated
● Types of Interest rates
○ Prime rate - available to banks’ best business customers (Corporations,
Monopolies, etc.)
○ Discount rate - rate financial institutions are charged to loan from the federal
reserves
○ Mortgage rate - amount individuals pay to borrow for the purchase of a (new)
home
● CHAPTER 7: Management and Leadership
● Role and Work of Managers
● What is a manager?
● What do they do?
○ Planning
○ Organizing
○ Staffing
○ Implementing
○ Controlling
● Autocratic
○ Very straightforward, what the manager says is exactly what you need to do
○ Tactical management
● Strategic
○ Project based
○ More creative jobs
● Mixed
○ Little bit of both depending on the circumstances of the business
○ Situational management
● Leadership is:
○ The ability to motivate individuals and groups to achieve important goals
 ○ Need for leadership
○ Leadership characteristics
● Importance of Human Relations
● Human Relations Skills
○ Self-understanding
○ Understanding others
○ Communication
○ Team Building
○ Developing Job satisfaction
● Job satisfaction – when you get what you want in or from your job. GROWTH!!
● Influencing People
● Kinds of Influence
○ Position influence
○ Reward influence
○ Expert influence
○ Identity influence
● Formal and Informal influence
● Formal – leaders naturally arise out of circumstances
● Informal – someone is elected as a leader
● Ethical business practices ensure that the highest standards of conduct are observed in
a company’s relationships with everyone who is a part of the business or is affected by
the business’ activities
● Ethics – principles of conduct
● How is something ethical or unethical?
○ Is it lawful?
○ Is it consistent with policy?
● CHAPTER 5: Business Organization
● The changing US job market
● Contingent worker - has explicit or inexplicit contract; non-permanent employees
● Intermediary -
● Roles of Businesses - provide employment for millions of people; employees use their
wages to purchase goods and services
● Non for profit and for-profit organizations
● For-Profit businesses usually have investors
● Stakeholders = investors aka shareholders
● Role of biz
○ Employment for mils
○ Emp wages spent on goods and services
○ Profits back to owner and investor
○ Biz pays taxes fed, state, local
○ Gov uses money to maintain facilities and provide protection
● Business Ownership
● Proprietorship
● Corporations
 ○ S-Corp
○ C-Corp
● Separate legal entity formed by documents filed w/ the state
● Now owned by individuals, by shareholders
● ROI, Return On Investment
● Diversity
● Articles of incorporation
○ Legal Document
■ Owners/shareholders
■ Operations
■ Legalities/policies -> Corporate Bylaws
■ Board of directors
● LLC, Limited Liability Company
○ Most partnerships file under this
○ Joint Venture, 2 or more biz’s merge in order to operate
● Organizational Structure for Businesses, CHP 5.3
● Organizational Structure; Routine, 5S
● Be able to maintain your mission and your vision statements
● Keep your policies
● CFA mission statement-
○ “To be America’s best quick-service restaurant at winning and keeping
customers”

● A mission statement is short, specific, written statement for why that business exists
● My mission statement for ME, “To be a helping hand that works behind the scenes to
make sure that everything goes smoothly.”
● You cannot lead your employees through the mission if you don't have a vision they can
follow
● My vision statement; “
● Goals of the company -
○ A precise statement of results the business expects to achieve
● Unity of command - a company hierarchy
● Span of control - number of employees assigned to a particular work task and manager
● Organizational Chart - show employees who authority figures are and who is over them
● CHP 6 Entrepreneurship and small business owning
● Entrepreneurship - the ability and readiness to develop, organize, and run a business
enterprise
● 1 in 10 adults are entrepreneurs
● 5,000 new businesses are opened each year
● Risk takers, depending on the business
● High risk businesses include - the Oil Industry, manufacturing
● Low Risk businesses include- Real estate, something with a low startup and maintaining
cost, something that doesn't depreciate
● 40% of small businesses have no employees because they either can’t afford them or it
is a one-man job
● The other 60% has 1 or more because there are more jobs in the business
● Finance tracking is VERY important
● Most small businesses ask for a loan
○ When you borrow money, it's called raising CAPITAL in your business
● Don’t start a business without a plan
○ Outlines EVERYTHING that goes in and out of your business
○ Feasibility Study - Is it possible for this business to succeed
■ A quick snapshot of financials within your biz plan
○ This is used to achieve a loan from someone
○ Get this by year three
■ Year 1 is your fluke year
■ Year 2, starts to drop down
■ By year three, it starts to cool down and level out
■ By year five, the bank wants to see profits
● Small businesses are over ½ the US’s GDP
● Innovation - an invention or creation that is brand new
● Improvement - a designed change that increases the usefulness of a product, service, or
process
● Something that people want or need, fix a problem, or they didn't know they needed is
the best kind of innovation and improvement
● Mitigate future risks
● Less than 500 employees, small business
● Good qualities of an entrepreneur are;
○ Trustworthy
○ Leader
○ Inquisitive
● Some needed skills are
○ Creative
○ Responsibility
○ Strong integrity - doing the right thing when no one is looking
○ Good working conditions
● Business plan
● A written description of the business idea and how it will be carried out including all
major business activities
● Format:
○ Name
○ Address
○ Hours of OP
■ Description of your product or service
■ Competition
● Complete SWOT and PEST analysis (PEST - Political, Economic,
Social, and Technology
 ■ Customer Analysis, you want to hit the best market
● Social media, location, religion, common language
■ Operations Plan
■ Marketing plan
● Marketing activities
■ Financial Plan
● Feasibility study
● Start-up costs / Build out
● Financial Statements
● Short term financing vs Long term financing
● Short term - the money needed to pay for the current operating activities of a business
● Long term -

Marketing
● The process of planning and executing the conception, pricing, promotion, and the
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives
● 3 main things needed to keep in check:
○ Trends
○ Consumer attitudes
○ Customer relations
● Market pace- the place where buying and selling take place
● Eight Functions work together to get goods and services from the producer to the
consumer:
○ Channel mgt/ distribution
○ Financing
○ Marketing information management
○ Pricing
○ Product service management
○ Promotion
○ Selling
○ Market planning
● Channel mgt/ distribution: how to get product to consumers ( Biz to Biz) a chain of
intermediaries a good passes through until it reaches the consumer
● Financial - how to get and handle your money for your business
● MIM - obtaining, organizing, and analyzing information about customers, trends, and
competitors which is used to make strong marketing decisions
● These functions require in-depth knowledge of activities the involve determining
information needs, designing data-collection processes
● Foundations of marketing -
○ 4 key principles
■ Business management, entrepreneurship
■ Communication and interpersonal skills
 ■ Economics
■ Professional development
● The marketing concept
○ Focuses on satisfying the needs and wants of customers
○ All employees must understand the concept in order for a business to be
successful
■ And provide the best service to customers
● CRM or CRSM
○ Customer relationship management
■ Customer information
■ Marketing communications
○ Creates meaningful relationships with customers based on the market
information
● Economic benefits of marketing
○ New and improved products
○

4 p’s
● Product
● Placement
● Price
● Promotion