Business refers to any organized efforts and activities taken by individuals to produce and sell goods and services for profit.
Business refers to any continuous production and distribution of goods and services with the objective of earning profits under uncertain market conditions.
Dealing in Goods and/or Services
Goods are materials that can be seen, felt and touched; services are intangible facilities that cannot be seen or touched and purchased and sold to meet customers’ needs and wants. Consumer goods include bread, shoes and clothes while services can include transportation banking insurance advertising entertainment medical care legal service etc.
When goods are bought and sold, ownership passes from one person to the next, because the buyer takes possession of an object such as a car. But when services are sold instead of goods, ownership remains permanent but temporary; for instance when renting a car. When purchasing a computer without purchasing physical devices such as Microsoft Office programs you are actually purchasing the ability to use specific software like this one.
Profit Motive
Profit motive is the desire of a business to earn profit through its goods and services, which helps understand customers’ needs more accurately, effectively market products, come up with innovative new ideas that can make long-term success more likely, take risks such as changing pricing strategies or reviewing business plans, as well as motivate entrepreneurs. It plays an essential role for businesses of any kind as it drives understanding between customer wants and marketing capabilities as well as new concepts being tested within businesses themselves.
Profit motive is an essential component of society, yet its implementation must be done responsibly in order to reap maximum benefit for society as a whole. An excessive focus on profitability may take precedence over more important considerations like customer satisfaction and how well a company is doing overall.
Business Structure
Business structures play an integral part in how an organization operates, who owns it and how taxes are paid. Therefore, selecting an appropriate structure for any organization is an integral decision for its success and must be carefully thought out before being made.
Different business structures include sole proprietorship, partnership, corporations, S-corporations and limited liability companies (LLC). Each of these options has different advantages and drawbacks so it’s essential that you consider all possible solutions before making a decision.
Sole proprietorships provide owners direct access to all profits, making them an excellent option for small businesses.
Partnership is an organizational structure that enables multiple people to share ownership without incurring excessive liability and taxes. Though partnership offers several benefits, setting one up can be more complicated and require additional paperwork.
Corporations provide more flexibility, allowing shareholders to own shares with limited liability protection while being easier and less susceptible to business disputes.
Business Activities
Business is the collective endeavor of individuals to produce and sell goods or services that satisfy society’s needs. Businesses range in size from sole proprietorships to multinational conglomerates companies.
Businesses may either be for-profit or non-profit. While for-profit entities seek to generate profits, non-profit ones aim to fulfill a social mission.
Business activities exist for two primary goals: earning profit and increasing productivity. To accomplish these objectives, a business must possess an efficient financial structure and resource management practices.
There are three primary types of business activities: investing, operating and financing. Of these three activities, operating activities represent core business functions.
Financing, which involves collecting funds for a company to expand and achieve financial stability, often takes the form of loans, bonds, or share issues. Although these activities don’t directly generate revenue through sales of products or services, they may ultimately prove profitable over time.
