1.3 Factors of production

 Now that you are able to differentiate between employed and self-employed, let's talk about what the word 'business' means . Businesses are important to an employed person because with a sustaining business, an employed person will continue to be employed.
Broken apart, business is is a combination of the following:

• A person/group of people with an idea;
• using resources (land, labour, capital)
• to produce a product or service
• that would help satisfy a want or a need

As can be seen from above, the creation of a business or a company or an organization would allow for the creation of a business activity to take place. Without business activity - there is no use of resources and therefore there would not be a final product or service. In other words - a business without the essentials would not be able to transform the idea into an actual product or service that a customer would want or need.

The resources or also known as the 'Factors of Production' are explained below:

• Enterprise/enterpreneurial skill =  a person or a group of people who has the idea to create a product or service that could fulfill the need or wants of society
• Land = a place for the business to activity to take place; or raw materials needed for the production of goods/services
• Labour  =  the manpower or help needed to ensure that the objective of the business is fulfilled, for example a salesperson, a clerk or a receptionist to pick up calls from potential consumers or investors
• Capital = money for the business to commence and purchase land or equipment, or pay salary to workers.​

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The factors of production are essential to help businesses produce the following:

• Consumer good - tangible, physical items such as bags, shoes, watches or consumables produced by businesses for consumers needs
• consumer services - intangible in nature - such as doctor's consultation or a complaint made to the customer service department for a badly manufactured shoe you have just purchased. 
• Capital good - mostly items (physical or tangible in nature) that are focused to business-to-business customers to aid them in the production of their product/output.  For example a business purchases circuit boards from another business and these circuit boards are then used in the business itself to produce their very own computers/electronic devices.