Look around you. The shop where you buy a pencil, the baker who bakes your bread, the bus that takes you to school — these are all businesses. A business is any group of people who make or do something, and then sell it to other people in exchange for money.
Why this matters: Businesses are all around you, every single day, even when you don't notice them. Understanding what a business really is, is the first step to understanding the whole world of work and money.
Goods and services
Businesses sell two different kinds of things.
| Kind | What it means | Example |
|---|---|---|
| A good | Something you can hold, carry home and keep | A loaf of bread, a pair of shoes, a toy |
| A service | Something someone does for you, not an object you keep | A haircut, a bus ride, fixing a bike |
An exchange: money for something useful
Every time you buy something, you are taking part in an exchange. You give the business money, and the business gives you a good or a service back. Both sides are happy: you get something you needed or wanted, and the business earns money it can use to keep going and pay the people who work there.
Sort each business into the right group:
- Baker (sells bread)
- Greengrocer (sells fruit and vegetables)
- Shoe shop (sells shoes)
- Hairdresser (cuts hair)
- Dentist (checks your teeth)
- Bus company (takes you somewhere)
A business only keeps going if people are happy to pay for what it sells. That is why every good business tries to give people something they really need or want — not just anything at all.