Businesses are organizations or entities engaged in commercial, industrial or professional activities. While businesses come in all shapes and sizes, their primary goal remains consistent: to generate profit.
The three primary legal forms of business ownership are sole proprietorship, partnership and corporation. Each has its own advantages and responsibilities for owners.
Definition
Business is the systematic production and/or exchange of goods or services that takes place regularly and continuously. It is undertaken with the goal of earning profit by satisfying human needs, though this activity often entails some degree of risk or uncertainty.
Businesses come in many forms, from sole proprietorships and partnerships to limited liability companies (or corporations). Some are small operations within one industry while others are large firms operating across multiple sectors.
The primary goal of any business is to generate profit, which helps maintain the business in the long run. Profitability is determined by how well-crafted products and services are offered to customers, with profits determined by this same quality assurance system.
Purpose
The purpose of business is to create and sell products or services that satisfy customer demands. The revenue generated from these sales helps support the owner’s lifestyle needs while allowing the company to reinvest back in its operations.
Companies that pursue an authentic purpose often make more money and enjoy higher levels of employee engagement than those without. Purpose also spurs innovation and facilitates transformative change.
In times of disruption, reappraising your purpose – or creating one from scratch – can be the most efficient way to steer strategic growth and combat challenges such as industry disruption and climate change. Furthermore, having a purpose helps your company better recognize and respond to shifting expectations, standards, and policy directions.
Functions
Business functions are the high-level groupings of capabilities and processes that outline a company’s work. They guarantee the organization runs efficiently, produces good results for its customers, employees, leaders and shareholders alike.
They assist a company in reaching its objectives. For these partnerships to be successful, they must work in concert and synergy.
Depending on the nature and size of a business, it may have multiple departments that manage different aspects of operations. These divisions are usually managed by experts within specific fields of expertise.
Goals
Business goals are objectives businesses set for themselves over a specified time. They may be general and high-level, or focus on specific measurable actions.
No matter the business goal, all objectives require a deadline. This helps focus the efforts of everyone within an organization and makes reaching that objective much more likely.
Types
Businesses form the backbone of our economy, offering products and services to consumers and other firms. Businesses come in all sizes from micro to large, operating across various industries. There is a vast array of business types with their own legal structure and regulations that must be adhered to. For instance, a business partnership differs from either a corporation or limited liability company in that each structure presents unique funding, liability, ownership, legal, and tax considerations for businesses. Entrepreneurs must carefully decide which structure best meets their business requirements and objectives. Fortunately, there are numerous business counselors and centers throughout Missouri that can guide them through the formation process of a company.
