Business can be for-profit or non-profit and involves commercial, professional, charitable or industrial activities. While the traditional objective is profit, some businesses have other goals. There are several types of businesses including retailers, services, merchandising, sole proprietorships, partnerships, limited partnerships, corporations, and limited liability companies. Key characteristics of business are that it is an economic activity focused on the production and sale of goods and services with the goal of earning a profit, though it also involves risk.
Business can be for-profit or non-profit and involves commercial, professional, charitable or industrial activities. While the traditional objective is profit, some businesses have other goals. There are several types of businesses including retailers, services, merchandising, sole proprietorships, partnerships, limited partnerships, corporations, and limited liability companies. Key characteristics of business are that it is an economic activity focused on the production and sale of goods and services with the goal of earning a profit, though it also involves risk.
Business can be for-profit or non-profit and involves commercial, professional, charitable or industrial activities. While the traditional objective is profit, some businesses have other goals. There are several types of businesses including retailers, services, merchandising, sole proprietorships, partnerships, limited partnerships, corporations, and limited liability companies. Key characteristics of business are that it is an economic activity focused on the production and sale of goods and services with the goal of earning a profit, though it also involves risk.
Business can be for-profit or non-profit and involves commercial, professional, charitable or industrial activities. While the traditional objective is profit, some businesses have other goals. There are several types of businesses including retailers, services, merchandising, sole proprietorships, partnerships, limited partnerships, corporations, and limited liability companies. Key characteristics of business are that it is an economic activity focused on the production and sale of goods and services with the goal of earning a profit, though it also involves risk.
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Business Definition
A business (entity) is an organization or any other entity engaged in commercial,
professional, charitable or industrial activities. It can be a for-profit entity or a not- for-profit entity and may or may not have a separate existence from the people/person controlling it. A business (activity) is a commercial activity which involves providing goods or services with a primary motive of earning profits. Objective Of The Business The business objective is what makes the business go on and conduct its activities in a long run. It is the reason why the business exists. While most of the people argue that profit making is the core objective of every business. Few have come up with the new underlying objective. According to the traditional concept, business exists only to earn profits by providing the goods and services to the customers. Types of Businesses There are many types of businesses, however, the main types are: 1. Retailers A grocery store is an example of a retailer. Retailer a business that purchases goods from a wholesaler and sells them to consumers, the final buyers of the goods 2. Service This type of business deals in selling intangible goods to the consumers. Unlike tangible goods, services cannot be stored or separated from the provider. Service firms offer professional services, expertise, commission-based promotions, etc. Examples include salons, schools, consultancy etc. 3. Merchandising is a middlemen business strategy where the business buys products from a manufacturer, wholesaler, or other partners, and sells the same at the retail price. It is usually known as a ‘buy and sell’ business as they make profits by selling the products at a price higher than their cost price. Examples of a merchandising business are grocery stores, supermarkets, distributors etc. 4. Sole Proprietorship: The simplest type of business. Sole proprietorships are owned and operated by a single person and are very easy to set up. 5. Partnership: A business owned by two or more people who share responsibilities and profits. 6. Limited Partnership: A business partnership, often between business operators and investors. 7. Corporation: A type of fully-independent business with shareholders. One of the most complex business types. 8. Limited Liability Company (LLC): A mixture of a partnership and a corporation, designed to make it easier to start small businesses. One of the most popular business types for startups.
Characteristics of Business Economic Activity: Business is an economic activity, as it is conducted with the primary objective of earning money, i.e. for an economic motive. Production/purchase of goods and services: Goods and services are produced or procured by business entities, so as to add value and sell them to the consumer. Goods are either manufactured by the company or procured from the supplier, with the aim of selling it further to the consumer, for profit. Selling of goods and services: Business must involve the transfer of goods to the customer for value, through selling, meaning that if the goods are acquired for personal consumption, then the transaction will not amount to business activity. Continuity in dealings: Every business requires regularity in transactions, i.e. an isolated transaction of exchange of goods or services will not be considered as business. So, to constitute business, the dealings must be carried out on a regular basis. Profit earning: The basic purpose of business is to make the profit from its activities. It is the spine of business, which keeps the business going, in the long term. Element of risk: Risk is the key element of every business, concerned with exposure to loss. Efforts are made to forecast future events and plan the business strategies accordingly. However, the factors that affect business are uncertain and so does the business opportunities, which can be a shift in demand, floods, fall in prices, strikes, lockout, money market fluctuation, etc
