MODULE 1

BASIC BUSINESS CONSIDERATION

What Is a Business?
 The term business refers to an organization or enterprising entity engaged in commercial, industrial, or professional activities.
The purpose of a business is to organize some sort of economic production (of goods or services). Businesses can be for-
profit entities or non-profit organizations fulfilling a charitable mission or furthering a social cause. Businesses range in scale
and scope from sole proprietorships to large, international corporations.
 Business also refers to the efforts and activities undertaken by individuals to produce and sell goods and services for profit.
Understanding Business
 The term business often refers to an entity that operates for commercial, industrial, or professional reasons. The concept
begins with an idea and a name, and extensive market research may be required to determine how feasible it is to turn the
idea into a business.
 Businesses often require business plans before operations begin. A business plan is a formal document that outlines the
company's goals and objectives and lists the strategies and plans to achieve these goals and objectives. Business plans are
essential when you want to borrow capital to begin operations.
 Determining the legal structure of the business is an important factor to consider, since business owners may need to secure
permits and licenses and follow registration requirements to begin legal operations.
 Corporations are considered to be juridical persons in many countries, meaning that the business can own property, take on
debt, and be sued in court.
 Most businesses operate to generate a profit, commonly called for-profit. However, some businesses that have a goal to
advance a certain cause without profit are referred to as not-for-profit or nonprofit. These entities may operate as charities,
arts, culture, educational, and recreational enterprises, political and advocacy groups, or social services organizations.
 Business activities often include the sale and purchase of goods and services. Business activity can take place anywhere,
whether that's in a physical storefront, online, or on a roadside. Anyone who conducts business activity with financial earnings
must report this income to the Internal Revenue Service (IRS).
Factors of production
Factors of production is an economic concept that refers to the inputs needed to produce goods and services. The factors are land,
labor, capital, and entrepreneurship. The four factors consist of resources required to create a good or service, which is measured by
a country’s gross domestic product (GDP).

In factors of production, the word “production” refers to a process of transforming inputs into outputs, which are finished products that
can be sold as a good or service. In order to do so, the input will go through a production process and various stages to reach the
hands of consumers.
Land as a Factor of Production
Land is a broad term that includes all the natural resources that can be found on land, such as oil, gold, wood, water, and vegetation.
Natural resources can be divided into renewable and non-renewable resources.

 Renewable resources are resources that can be replenished, such as water, vegetation, wind energy, and solar energy.
 Non-renewable resources consist of resources that can be depleted in supply, such as oil, coal, and natural gas.
All resources, whether it is renewable or non-renewable, can be used as inputs in production in order to produce a good or service.
The income that comes from using land and its natural resources is referred to as rent.
Besides using its natural resources, land can also be utilized for various purposes, such as agriculture, residential housing, or
commercial buildings. However, land differs from the other factors of production because some natural resources are limited in
quantity, so its supply cannot be increased with demand.

Labor as a Factor of Production

Labor as a factor of production refers to the effort that individuals exert when they produce a good or service. For example, an artist
producing a painting or an author writing a book. Labor itself includes all types of labor performed for an economic reward, such as
mental and physical exertion. The value of labor also depends on human capital, which is determined by the individual’s skills,
training, education, and productivity.
Productivity is measured by the amount of output someone can produce in each hour of work. The income that comes from labor is
referred to as wages. Note that work performed by an individual purely for his/her personal interest is not considered to be labor in an
economic context.
The following are several characteristics of labor in terms of being a factor of production:

 First, labor is considered to be heterogeneous, which refers to the idea of how the efficiency and quality of work are different
for each person. It differs because it depends on an individual’s unique skills, knowledge, motivation, work environment, and
work satisfaction.
 Additionally, labor is also perishable in nature, which means that labor cannot be stored or saved up. If an employee does not
work a shift today, the time that is lost today cannot be recovered by working another day.
 Also, another characteristic of labor is that it is strongly associated with human efforts. It means that there are factors that
play an important role in labor, such as the flexibility of work schedules, fair treatment of employees, and safe working
conditions.

Capital as a Factor of Production

Capital, or capital goods, as a factor of production, refers to the money that is used to purchase items that are used to produce goods
and services. For example, a company that purchases a factory to produce goods or a truck that is purchased to do construction are
considered to be capital goods.
Other examples of capital goods include computers, machines, properties, equipment, and commercial buildings. They are all
considered to be capital goods because they are used in a production process and contribute to the productivity of work. The income
that comes from capital is referred to as interest.
Below are several defining characteristics of capital as a factor of production:

 Capital is different from the first two factors because it is created by humans. For example, capital goods like machines and
equipment are created by individuals, unlike land and natural resources.
 Additionally, capital is also a factor that can last a long time, but it depreciates in value over time. For example, a building is a
capital good that can endure for a long period of time, but its value will diminish as the building gets older.
 Capital is also considered to be mobile because it can be transported to different places, such as computers and other
equipment.

Entrepreneurship as a Factor of Production

Entrepreneurship as a factor of production is a combination of the other three factors. Entrepreneurs use land, labor, and capital in
order to produce a good or service for consumers.
Entrepreneurship is involved with establishing innovative ideas and putting that into action by planning and organizing production.
Entrepreneurs are important because they are the ones taking the risk of the business

Types of Businesses
There are different types of businesses to choose from when forming a company, each with its own legal structure and rules.
Typically, there are four main types of businesses: Sole Proprietorships, Partnerships, Limited Liability Companies (LLC), and
Corporations. Before creating a business, entrepreneurs should carefully consider which type of business structure is best suited to
their enterprise.
This article will provide a quick overview of these four basic types of businesses to help entrepreneurs make one of their most
important decisions.
#1 Sole Proprietorship
 A sole proprietorship is an unincorporated company that is owned by one individual only. While it is the most simple of the
types of businesses, it also offers the least amount of financial and legal protection for the owner. Unlike partnerships or
corporations, sole proprietorships do not create a separate legal identity for the business. Essentially, the owner of the
business shares the same identity as the company. Therefore, the owner is fully liable for any and all liabilities incurred by the
company.
#2 Partnership
 As the name states, a partnership is a business owned by two or more people, known as partners. Like sole proprietorships,
partnerships are able to take advantage of flow-through taxation. This means that the income is treated as the owners’
incomes so it is only taxed once. Owners in partnerships are responsible for the liabilities of the firm. However, there are
some nuances to this. There are different types of partnerships: general partnerships, limited partnerships, and limited liability
partnerships.
#3 Limited Liability Company (LLC)
 Limited liability companies (LLCs) are one of the most flexible types of businesses. LLCs combine aspects of both
partnerships and corporations. They retain the tax benefits of sole proprietorships and the limited liability of corporations.
LLCs are able to choose between different tax treatments. As long as the LLC chooses not to be treated as a C corporation, it
retains its flow-through taxation status.
#4 Corporation
 Corporations are a separate legal entity created by shareholders. Incorporating a business protects owners from being
personally liable for the company’s debts or legal disputes. A corporation is more complicated to create, as compared to the
other three types of businesses. Articles of incorporation must be drafted, which include information such as the number of
shares to be issued, the name and location of the business, and the purpose of the business.

In sole proprietorships and partnerships, if one of the owners passes away or declares bankruptcy, the company is dissolved.
Corporations exist as a legally separate entity. Therefore, they are protected from this situation and will continue to exist even if the
owner of the business passes away.

Advantages and Disadvantages of a Single Proprietorship, Partnership and Corporation

Sole Proprietorship

Liability Taxes Advantages Disadvantages

 Owner absorbs all losses
 Tax breaks  Unlimited liability
 Owner retains all profits  Difficult to get financing
Unlimited: owner No special taxes; owner  Easy to start and dissolve  Management deficiencies
is responsible for pays taxes on profits; not  Flexibility of being own boss  Lack of stability in case of injury,
all the debts of subject to corporate  No need to disclose death, or illness
the business. taxes business information  Time demands
 Pride of ownership  Difficult to hire and keep highly
motivated employees
Partnership
Liability Taxes Advantages Disadvantages
 Owner(s) retain all profits
 Unlimited for general partner; limited
partners risk only their original  Unlimited financial liability for general
Unlimited investment. Individual taxes on partners
for general business earnings; no income taxes  Interpersonal conflicts
partner; Individual taxes as a business  Financing limitations
limited on business  Easy to form and dissolve  Management deficiencies
partners earnings; no  Greater access to capital  Partnership terminated if one partner
risk only income taxes as  No special taxes dies, withdraws, or is declared legally
their a business  Clear legal status incompetent
original  Combined managerial skills  Shared decisions may lead to
investment.  Prospective employees may be disagreements
attracted to a company if given
incentive to become a partner

Corporation
Liability Taxes Advantages Disadvantages
 Double taxation
 Limited liability
 Difficult and expensive to start
 Skilled management team
 Individual stockholder has little control over
 Ease of raising capital
operations
 Easy to transfer ownership by
 Financial disclosure
Limited; multiple taxation selling stock
 Lack of personal interest unless managers
 Perpetual life
are also stockholders
 Legal-entity status
 Credit limitations
 Economies of large-scale
 Government regulation and increased
operations
paperwork
 MODULE 2
Operating Characteristic of Hotel and Restaurant

Operating Characteristic of Hotel and Restaurant

High-Quality Food
A good restaurant sets a high standard for its food quality and ensures that guests receive the same quality with every meal. Serving
quality food can earn your restaurant a good reputation and compel your guests to return for repeat visits. High-quality ingredients
and an experienced cook are important to serving good food consistently. A good cook understands your guests' needs and works
well with the kitchen staff to ensure that guests receive their meal the way they ordered it every time.

A Positive Overall Experience

One of the key characteristics of a successful restaurant is a positive customer experience, explains The Restaurant Times. The staff
who interact with your guests should be courteous and maintain a positive attitude. Servers should know the menu well, deliver
guests’ food and drinks on time, and quickly address any issues that an unsatisfied guest may have.

All staff should help to keep the restaurant clean at all times, including the kitchen, food preparation areas and any areas that guests
come into contact with. Make sure you check your online reviews on a regular basis to learn what customers think of the experience
they received at your restaurant.

A Unique Selling Differential

If your restaurant provides good food and service but is too similar to other restaurants, customers may overlook your restaurant when
deciding where to dine. A good restaurant should have one or more unique features that stand out in a customer’s mind and give it a
competitive advantage over others. This is called your unique selling differential, or unique selling proposition, and you build your
brand around this, according to Entrepreneur magazine.

For example, your restaurant may be the only restaurant in town that makes its ingredients fresh daily or it may have an amazing view
of the city that none of your competitors have. You might be an affordable restaurant that offers coupons, discounts and kids-eat-free
special, or you might be a high-end, fine-dining eatery that has a dress code.

Your food, decor and staff are just some of the features of a restaurant. Your brand should be build around something solid. Funny
restaurant names, for example, might be cute for the first few months, but often get old after a while. Think about your restaurant
description. If you can't describe your restaurant in a sentence, you might not have a strong identity.

Good Business Management

If you don't price your meals to accurately cover your food, overhead, taxes and desired profits, you'll be out of business sooner than
later. A good restaurant owner manages the business aspect of the restaurant properly, which increases the chances that it can
provide quality food and service without interruption.

Running your restaurant properly can also help boost your small business’s profits. You must manage your restaurant’s finances,
keep good records and stay current with regulatory requirements, such as taxes and health inspections. For example, consistently
paying your vendors on time reduces the risk of running out of items on your menu,

Nature of Business

The nature of a business describes the type of business it is and what its overall goals are. It describes its legal structure, industry,
products or services, and everything a business does to reach its goals. It depicts the business’s problem and the main focus of the
company’s offerings. A company’s vision and mission statement also provide an insight into its nature.
The following aspects determine the nature of business:

Regular process – the profit-generating processes that are regularly repeated.

Economic activity – activities that maximise profit.
Utility creation – a kind of utility the goods or services create for the consumer, such as time utility, place utility, etc.
Capital requirement – the amount of funding required for the business.
Goods or Services – types of goods (tangible or intangible) offered by the business.
Risk – the risk factor related to the business.
Profit earning motive – the businesses’ profit-earning motive.
Satisfaction of consumers’ needs – based on the consumers’ satisfaction.
Buyers and sellers – the type of buyers and sellers involved in the business.
Social obligations – all businesses have corporate social responsibilities to undertake.

Types of Lodging Operations (2 Types)

Lodging operations and accommodations are defined to include, but not limited to, hotels, motels, bed and breakfasts, inns, short
term rentals, such as those made available through VRBO, Home away, Air Bnb and other services, parks for recreational vehicles
and campgrounds, and all public and private camping facilities.

Hotel categories
hotel is a commercial establishment offering lodging and guest services provided by on-site staff. Hotel rooms are private and never
shared with strangers. A hotel must provide access to a sink, toilet, and a shower or bath. Units in a hotel may have kitchens,
although this is not required. Travelers must be able to book rooms for a single night.

Motel
A motel is a roadside hotel designed primarily for motorists with rooms arranged in a low building and parking directly outside the
room. Motels may have few or no amenities.

Resort hotel
A resort hotel is typically spread out over more land area than a hotel, and provides more services, activities, and amenities. It's a
self-contained leisure destination, where guests can find on the premises everything they might need during their vacation. A resort
hotel must have on-site staff and an establishment serving food on the resort grounds.

Inn
inn is a small hotel with fewer than 20 rooms. To be categorized as an inn, a location MUST have a food or drink service
establishment on premises that is open to the public.
Guest house
 A guest house is a private house or a small commercial building that offers accommodations to travelers. The owner or staff
must be present to take care of guests’ needs, but a guest house typically offers fewer amenities and services than a hotel.
Rooms are usually unique, and there is often a common living room where guests can sit and socialize with others.
Bed and breakfast
 A bed and breakfast (B&B) is a small and independently-run lodging establishment in a private residential house. It’s similar
to a guest house, but here the hosts live in the house and take care of the guests. A home-cooked breakfast is available. This
breakfast must not be served in a restaurant and must be prepared for individual guests. Meals other than breakfast may
sometimes also be offered on request.
Hostel
 A hostel offers affordable accommodation where the traveler rents a bed (usually in a dormitory) and shares the facilities with
other travelers. Membership may or may not be required. Some hostels also provide private rooms at a higher cost.
Camping cabins
 Camping cabins are often found in a park or forest, and may feature bungalows, cabins, or mobile homes. Camping cabins
usually don’t have personnel on site, other than at the front desk. They usually offer shared facilities or amenities, such as a
reception area, communal kitchen, communal bathroom, swimming pools, or children’s play areas.
Vacation Rentals (non hotels)
 Vacation rentals are similar to hotels in some ways. Both take reservations and provide overnight lodging. However, there are
important differences in what guests and owners expect from a vacation rental experience. For example, it wouldn’t be
appropriate for a traveler to knock on the door of a vacation rental, looking for a room for the night. That’s the reason for one
important difference between hotels and vacation rentals: their locations don’t appear on Google Maps. Instead, they’re
featured in Google search results and ads when people search for lodging in a particular area.
Apartment
 An apartment, or flat, is a self-contained housing unit that occupies only part of a building.
Bungalow
 A bungalow is a small house or cottage
Holiday village
 A holiday village is a holiday resort where the visitors stay in villas. There is generally a central area with shops,
entertainment, and other amenities.
Studio apartment
 A studio apartment, also known as a studio flat, a self-contained apartment or efficiency apartment, is an apartment which
consists of one large space. The bedroom and living space are typically combined in one area with no doors separating the 2
areas.
Villa
 Villas are large homes, typically in the countryside, that may or may not consist of multiple buildings surrounding a common
area. Villas are functionally equivalent to a country house.

What is Business Analysis and Steps You Should Follow

business analysis is the discipline of recognizing business needs and findings solutions to various business problems. In simpler
words, it is a set of tasks and techniques which work as a connection between stakeholders. These help them understand
organization’s structure, policies, and operations. They can also recommend solutions to help the business reach its goals.
You can conduct business analysis to get an overview of the current state of your company. You might use it to identify your business
needs too. Most often, the analysis is performed to state and confirm solutions which meet business needs or goals.
Get oriented
People expect business analysts to start contributing to projects as quickly as possible and make a positive impact. Sometimes, they
get involved while the project is ongoing. It is essential to grant them some time to get oriented. They clarify the scope, requirements
and business objectives. They spend some time to collect some basic information.
The following are the main responsibilities they have in this step:
  Clarifying your role as the business analyst.
 Determining who the primary stakeholders are.
 Having a clear understanding of the project history.
 Understanding the existing system and processes.

Identify the primary objectives of the business

Most business analysts start by defining the scope. This can cause problems. It is more effective to understand the business needs
before defining the scope of the project.
Your responsibilities they have in this step are:

 Discovering primary stakeholders’ expectations.

 Merging conflicting expectations. Your business community begins the project a shared understanding of the objectives.
 Making sure that the business objectives are clear and attainable.
 Ensuring that the business objectives set the stage for defining a scope.

Define the Scope of your Business Analysis

Define a clear and complete statement as scope. It will serve as a go-forward concept and help the team realize what the business
needs. Remember, scope is not an implementation plan. It merely guides all the steps of the business analysis process.
In this step, the business analysts’ main responsibilities are:

 Defining a solution method to find the nature and extent of technology and process changes which should be made.
 Drafting a clear scope statement. Reviewing it with the stakeholders.
 Confirming the business case

Define the requirements in details

Clear and actionable detailed requirements are important. Detailed requirements provide the implementation team with the
information they need to devise the solution. The most important responsibilities are:

 Collecting the information needed

 Analyzing the information and using it to make a first draft
 Reviewing and validating the deliverables
 Asking questions to fill the gaps.

The benefits of Business Analysis

Business Analysis is important for any organisation, because it helps with identifying all vulnerabilities and issues and helps to
implement proper solutions and continuously monitor the results, based on the data they collect.
Considering the fact that businesses nowadays has a lot of competitors and the market is ever-changing, Business Analyst became a
very valuable resource. Business Analysis can help organisations with better understanding of their business needs and identifying
their goals in order to meet them.
Common Business Analysis Technique
What are business analysis techniques?
Business analysis techniques are the specific processes used to audit and improve business operations. These step-by-step
procedures help analysts stay organized and make strategic decisions during the analysis.
Popular Business Analysis Techniques

SWOT Analysis
S.W.O.T. stands for Strength, Weakness, Opportunities, and Threats. This is the most important technique used in business analysis.
It is conducted by a group of people with different mindsets and perspectives in the company in order to access a changing
environment and react accordingly.
It is kind of the business framework in which strengths and weaknesses are internal data factors whereas opportunities and threats
are the external data factors.
MOST Analysis
M.O.S.T. stands for Mission, Objective, Strategy, and Tactics. MOST analysis is also a powerful technique to do business analysis.
MOST analysis always works from the top. Business Analyst should ensure that it retains the focus towards goals which are most
important for the organization.
It gives a better understanding of the organization’s capabilities and vision (purpose) and to provide answers to the interrogation such
as what does the organization wants to achieve in terms of mission and objectives, how these actions can be implemented in
strategies and tactics.

PESTLE Analysis
In any organization, there are many external macro-environmental factors that can affect its performance. PESTLE analysis is
sometimes also referred to as the PEST analysis and has used in various business applications.
PESTLE stands for Political, Economical, Social, Technological, Legal and Environmental. These forces or factors can create
opportunities or threats to any organization so it is a very powerful tool or technique of business analysis.

System Analysis
System analysis is a systematic problem-solving method for collecting and interpreting facts, looking system’s weaknesses, identify
business problems, or decomposition of the system into smaller parts. It is an approach to minimize the error of different issues.

System analysis is the process of studying the company’s perspective, identifying its goals, creating a process together to make an
efficient system. For instance, a problem can be solved in a few hours without analyzing a system completely but sometimes it
creates many other irrelevant issues. So, the better you understand the system, chances are less for any problem to arise.

Defining Business Technology

What is Business Technology?
 Business technology is a method of organizing and coordinating technology management throughout an organization. It is a
combination of management strategies, tools, organizational structures, and technological governance aimed to ensure that
the use of technology across the enterprise is optimized with the overriding goal of meeting customer demands and
expectations. Most companies recognize that they must continually challenge not only their competitors but also themselves
in order to enhance their consumers' perceptions and their capacity to meet market demand.
 Since then, a lot of work has gone into attempting to " contain" information technology, ensuring that it is under the authority of
IT teams and that spending is kept under control. Of course, cost control is a critical discipline, but digital has liberated
technology and made it publicly available, making it impossible for a single department to effectively manage.
Common Types of Business Technology
Here is a list of the most common types of business technology to assist you in making the shift from traditional practices to modern-
day techniques:

Computers
 Computers are utilized in a variety of enterprises. They have software that allows them to execute a wide range of tasks such
as analysing financial information, sending and receiving emails, and designing sales presentations. The computer is
available as a desktop computer or a portable laptop for use in the office or when traveling.

Software
 To do specific activities, computers need several types of software, which include applications and operating information.
Microsoft Word, a word processing package, and Microsoft Excel, a financial spreadsheet system, are used by businesses.
Microsoft PowerPoint and Apple Keynote are also used to create professional-looking sales presentations fast and easily.
Businesses utilize software that is tailored to their requirements.

Networking
  Networking is a method of interacting with groups of people in order to share information and documents, store data and send
emails. It also enables the sharing of a printer or storage device between PCs. A network might be limited to computers within
a single office or connected to multiple offices. Businesses need networking since it allows them to form contacts with others
in their connected sectors in order to find new clients and partners, as well as expand.

Telephone Communication
 Establishing commercial ties requires effective communication. As a result, businesses connect with customers and
organizations via a telephone system. This allows for quick, efficient, and personal dealing with customers. Great customer
service and effective communication with your staff will help your company develop a strong reputation and expand in the
long run. There are currently commercial telephone systems that have a number of functions to meet a company's demands.

Accounting System
 An accounting system allows organizations to keep track of their expenses and revenue. Small businesses are the most
common users of Quickbooks. It's easy to set up and maintain. Larger businesses, on the other hand, use SAP Business One
or Sage Accpac, which allow for more flexibility and system connectivity. The ideal accounting system for your company is
determined by its size and needs. Before making a decision, it's a good idea to talk to your accountant about your
possibilities.

Inventory Control System

 An inventory control system is used to manage a company's whole inventory. It accurately keeps track of products, including
how much inventory is in stock, updating the system when the new inventory arrives as well as when it is sold, and keeping
detailed records. To keep the proper balance of things in their warehouse, understand what they have, and examine their
finances, businesses need an adequate and organized system to manage their inventory.