What is Business, Objective, Types, And More

What is Business: In other terms, a company is an economic activity that primarily attempts to profit from the sale or exchange of products or services that suit the demands of clients. It can encompass one or more manufacturing processes, such as natural resource extraction, manufacture, distribution, storage, sale, or resale.

A restaurant, a clothes store, a pharmacy, or another commercial establishment where will sell an item or service will be a business.

Business Objective – Profits

The company’s main objective is profit, that is, to create a profit. When an association does not seek gain, it cannot say that its performance is a business even with a similar description. Thus, for example, government services related to officious procedures (such as obtaining driving documents, residency application, title validation application, etc.) do not correspond to a business even when a service will provide, which implies a charge.

The means to obtain profits in a business is to generate some added or surplus value. Thus, for example, in the case of commerce, the company consists of the resale of goods. The value added by the merchant is his intermediation, that is, serving as a channel of communication between buyers and manufacturers.

How A Business Starts

A business arises from detecting a need that can be satisfied with a particular good or service. Then, the means are sought to offer these goods or services profitably.

For a business to work, it is essential to have an opportunity, resources to start the activities, and the work and creativity of the founders.

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Business Types

Companies can be of different types:

National Or International

The business can develop its activity within a country’s borders (national) or expand its activities to several countries (international).

Physical Or Online

Businesses include physical or local sales structures and transactions and exchanges made online. Can offer even services such as distance education to clients without practically requiring their infrastructure.

According To Economic Action

Businesses can group according to the economic activity. Generally, three main types of sector or activities will consider:

Primary:  Referring to the removal of raw materials. Thus, for example, we have mining, fishing, livestock, etc.

Secondary:  Includes all activities that change inputs into goods and services. Thus, textiles, wines, food, etc. are manufactured.

Tertiary:  Groups activities related to services. Thus, we have merchants, transportation, hairdressing, etc.

According To Their Legal Form

Below, we describe the most common:

Individual Company: Freelance entrepreneur.

Limited company: Formed by one or more partner who contributes capital and work.

Limited company: It comprises several partners who share in the company.

Labor Society:  When the workers have a large part of the company in their possession.

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