Table of Contents Hide
- What is Business?
- Types of business
- Types of Business Ownership
- Characteristics of a Business
- Business Ideas
- What main business means?
- Why is business so important?
- What is the scope of business?
When you hear the word “Business” what comes to your mind?
Many people believe that business is a commercial activity that involves providing goods or services in exchange for profits. Well, that is the idea but, there is a lot more about the business you never knew, and you will discover as you read through this article.
What is Business?
A company is an organization or other body that conducts commercial, professional, non-profit, or industrial activity. It may be for-profit or not for income and may or may not have a separate existence from the individuals/people who control it.
A business (activity) is a commercial activity in which goods or services are given the primary motive to generate an income.
The concept of business is the basic idea of business. The business model, plan, vision, and mission are developed based on this concept. For example, Uber started with the concept of integrating taxi drivers and offering their services under one brand as needed. Every other business strategy is developed based on this concept.
The goal of the business is to keep the business doing business for the long term. This is why the business exists. While most people argue that having a profit is the main goal of any business. Few developed a new underlying goal.
According to the traditional concept, business consists only in earning income by providing goods and services to customers.
According to the modern concept, the underlying goal of any business is customer satisfaction because it will lead to maximum profits. When the customer is satisfied, the business is good.
Types of business
Businesses can be classified into 4 types, but not limited to them. These are the –
Manufacturing companies are the manufacturers who develop the product and sell it either directly to the customer or to middlemen to make sales. Examples of manufacturing companies are steel mills, plastic mills, etc.
This type of business deals with selling intangible goods to consumers. In contrast to material goods, services cannot be hidden or isolated from the provider.
Service companies provide professional services, expertise, commission-based promotions, etc. Examples are salons, schools, counseling, etc.
Merchandising is a middleman business strategy where the company buys products from a manufacturer, wholesaler, or other partner and sells them at a retail price. This is commonly referred to as “buying and selling” because they make a profit by selling products at a price higher than the cost price.
Examples of merchandising businesses are grocery stores, supermarkets, retailers, etc.
Hybrid businesses have the characteristics of two or more types of companies discussed above. For example, a restaurant makes its own dishes (manufacture), sells products such as cold drinks made by other companies (goods), and provides service to customers
Types of Business Ownership
Corporate ownership comes in many forms based on the number of owners, owner responsibility, representation, and motive. These are the –
A sole proprietorship is a company owned and operated by a single person. Easy to set up, use, and register. All business income is the property of the owner and he is responsible for all liability incurred.
The main disadvantage of this business is that the owner has unlimited liability. This means that lenders can track the owner’s personal assets if the company does not pay for them.
When two or more people join the force to run a business, they usually form a partnership. Partnerships come in two forms – general and limited. A partnership is like ownership, but there is more than one owner, and all owners have unlimited liability. In a limited partnership, some or all of the partners have limited liability.
A company is a company that has a separate legal identity from the people who own or operate it. Ownership is usually represented in the form of shares.
Owners have limited responsibilities but are not necessarily involved in running the business. The company is managed by a team (Board of Directors) elected by the shareholders.
Limited liability company
A limited liability company is a hybrid type of business that has characteristics of both corporations and partnerships. A partnership as it has not been registered and a company because all partners/owners have limited liability.
The cooperative is a private business organization owned and controlled by people for mutual benefit. These people are called members and benefit from the goods and services offered by the cooperative. All members are expected to contribute to the management of the company as the main motive of the cooperative is to provide a service to all members rather than a return on investment.
Characteristics of a Business
The following are the important characteristics of a business:
Business is an economic activity of producing and selling goods and services. It offers job opportunities in various sectors such as banking, insurance, transportation, industry, commerce, etc. It is an economic activity associated with the creation of public service companies to satisfy human needs.
Provides a source of income for society. The business opportunities to the creation of job opportunities and therefore economic growth. Makes the industrial and economic development of the country.
Buy and Sell
The basic activity of a company is commerce. The business includes the purchase of raw materials, equipment, and machinery, stationery, real estate, etc. On the other hand, finished products are sold to consumers, wholesalers, retailers, etc. The business makes various goods and services available to the various departments of the company.
Business is not a one-time activity. It is a continuous process of production and sale of goods and services. A single trade cannot be called an agreement. A business must be run periodically in order to grow and generate regular returns.
Companies must continually engage in research and development in order to gain a competitive advantage. A continuous improvement strategy helps increase the profitability of the company.
Risks and uncertainties
Risk is defined as the impact of uncertainty on business objectives. Risk is associated with each business. The business is exposed to two types of risk: insurable and uninsurable. An insurable risk is predictable.
Creative and dynamic
Modern business is creative and dynamic. A company has to develop creative ideas, approaches, and concepts for the production and sale of goods and services. This means taking things in a fresh, new, and inventive way.
You have to be innovative because the company operates in a constantly changing economic, social, and technological environment. Companies must also carry out new products to meet the growing needs of consumers.
The phase of business has changed from traditional concepts to modern concepts. Today, the company has a consumer-centric approach. Customer satisfaction is the highest priority in all economic activities.
Choosing the path of entrepreneurship can be very challenging. It requires building a business from the ground and getting it up and running is serious work, however, there are ways to ease the stress. First is getting a business mentorship; every successful entrepreneur you see today has who they look up to.
Before you can run any business successfully, you must get a business plan; this will help you discover any weaknesses in your business idea so you can address them.
Business Yield Idea generator
What makes this the best anyone can find online is that this generator is purely done by humans not a set of algorithms or Artificial intelligence.
Humans gather data and do quick but detailed research
based on the information you provide. It’s simple, answer a set of quick and easy questions and your business ideas will be on your email in less than 24hrs.
24hrs because this is the most feasible idea generator as it takes into consideration, your budget, intended startup locations, talents and skills, the available time you can give the business, etc.
Based on these data with an extensive feasibility study and just a little token, you would have a list of ideas sent to your email with links to give you access to instant business plans, a Business model canvas, and up to 3 years of financial analysis to help you get started for the business.
What main business means?
Principal business(es) refers to the principal business(es) of the Company as declared in its financial statements.
Why is business so important?
Numerous elements of a nation’s economy, such as productivity, employment, and a measure of financial security, are facilitated by businesses.
What is the scope of business?
It encompasses all human actions that serve to meet the needs and desires of a society’s inhabitants. A significant portion of the firm is devoted to delivering the final or completed items or goods to the intended customers.