Business is making one’s living or making money by producing or buying and selling products (such as goods and services). Simply put, it is “any activity or enterprise entered into for profit. It does not mean it is a company, a corporation, a partnership, or have any such formal organization, but it can range from a street peddler to General Motors.
Having a business name does not separate the business entity from the owner, which means that the business owner is responsible and liable for debts incurred by the business. If the company acquires debts, the creditors can go after the owner’s possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business.
The term is also often used colloquially (but not by lawyers or by public officials) to refer to a Company. On the other hand, a company is a separate legal entity and provides for limited liability, as well as corporate tax rates. A company structure is more complicated and expensive to set up but offers more protection and benefits for the owner.
The Basics of a Business
Generally, a business begins with a business concept (the idea) and a name. Depending on the company’s nature, extensive market research may be necessary to determine whether turning the idea into a business is feasible and delivering value to consumers. The business name can be one of the most valuable assets of a firm; careful consideration should be given when choosing it. Businesses operating under fictitious names must be registered with the state.
Businesses most often form after developing a business plan, a formal document detailing a business’s goals and objectives and its strategies of achieving the goals and objectives. Business plans are almost essential when borrowing capital to begin operations.
It is also essential to determine the legal structure of the business. Depending on the type of business, it may need to secure permits, adhere to registration requirements, and obtain licenses to operate legally. In many countries, corporations are considered juridical persons, meaning that the business can own property, take on debt, and be sued in court.
Objective Of The Business
The business objective is what makes the business go on and conduct its activities in the long run. It is the reason why the company exists. At the same time, most people argue that profit-making is the core objective of every business. Few have come up with the new underlying goal.
According to the traditional concept, a business exists only to earn profits by providing goods and services to the customers.
According to the modern concept, the underlying objective of every business is customer satisfaction, as this is what results in most profits. If the customer is satisfied, the company excels.