Business is a broad term that refers to any activity that seeks profit from the exchange of goods and services. It may be a for-profit endeavour that aims to make money or a non-profit organisation that aims to help a social cause. These businesses can be structured as limited liability companies, partnerships and corporations. They can range in size from tiny operations that operate within a single industry to multinational giants that operate across many industries worldwide. Some examples of successful businesses are Amazon, Apple and Walmart.
The operation of businesses are governed by the laws and regulations of the relevant country and industry. The structure of ownership of a business is also governed by law and varies between jurisdictions. Some common forms include sole proprietorship, where a single person owns and operates the business. In partnership, two or more people jointly own and operate the business with the resources and funds contributed by each partner. The profits and losses are shared based on the contribution. In a corporation, the business has a distinct legal identity from its owners and is run by a board of directors. Ownership is represented by shares of the company’s stock. In most cases, the shareholders have limited liability.
A business can produce a variety of products and services that are used by consumers and other businesses. The products that a business produces can be either consumer goods or capital goods. The capital goods are converted into consumer goods by the business enterprise, which then offers them to the market for sale. The consumers then purchase the goods from the wholesalers or retailers. The business enterprise also provides services like marketing, finance, human resources and information technology.
The underlying objective of every business is to earn a profit. This profit can be in the form of cash payments, barter style trades or other financial benefits such as a rise in the value of assets. However, a business can still be considered to be successful even if it incurs a loss. The main reason for this is that any tangible outcome of an activity that contributes to reaching the business goals has value. This principle is also applied to valuing the non-financial benefits of a business. The concept of a ‘business benefit’ has been adopted by many organisations and serves as an effective tool for planning, decision making and analysis. For example, an organisation that is committed to sustainability can measure its success by the environmental and ethical impact of its business activities. This will then provide a basis for the organisation to make decisions and improve its performance. For example, a business can increase its environmental and ethical impact by investing in green technologies. This will lead to a reduction in the cost of running its operations and thereby lower its carbon footprint. As a result, it will be able to attract more customers and gain competitive advantage. It can also improve its reputation by demonstrating corporate responsibility.