ALL ABOUT BUSINESS
- What is business all about, and who benefits from a business? Explain.
In the current world, with the first growth of different economic classes, almost everyone has to understand the word “business, “as most of the activities we do in our daily lives revolve around the term. Business can be simply defined as; an organization or an entity such as an enterprise that involves commercial, industrial, or other professional practices such as teaching. The enterprises can major on a specific product, service, or rental of the manufacturing products. This is mostly affected by the business plan, which is made before the startup of any business. This plan helps with the strategies and logistics to be deployed to achieve the business’s set goals, both long term, and short term.
Setting up any business is not as easy as many individuals may think; you have to abide by all the legal structures and instruments of a particular business, such as tax liabilities, permits, and all required licenses. Most need more than just one to kick off. However, legal obligations to their employees also apply at this stage. The idea of coming up with the business is an instrumental concept behind every business. The business model, plan, vision, and mission and its development entirely rely on this initial concept to grow. For instance, most of the newly developing concepts such as Uber were brought about by the idea of aggregating taxi drivers and providing their services on demand under one platform. Every other business strategy was developed based on this concept, and positive growth witnessed widely. The business objectives and goals make it go on and conduct its activities and not profit-making as most may think of as the central core for its existence. This is an old tradition and shouldn’t be relied on.
What is a business?
Business rangers either as your occupation, profession, or trade, or is a commercial activity that involves providing goods or offering services in exchange for money or profit-making. This profit is not only in money form but can also be in a monetary form as long as it is acknowledged by the business or the entities involved.
A business is an organisation body involved in commercial activities, professional practices, charitable or industrial activities. This can be of profit purposes, and most are attached to the initial founders or the person controlling the entity. It can be a for-profit or not-for-profit entity and may or may not have a separate existence from the people/person controlling it. Business can also be described as any commercial activity(s) gearing towards profit-making through the production of goods or offering a service as the primary motive.
What forms of business do we have?
Several factors determine the formation or the ownership of any business entity. These can be the number of owners or partners, the liability, and the motive or purpose for existence. These businesses can be in the form of the following:
Sole Proprietorship
This is a business or entity owned by one person and operated by a single person. It is effortless to set up and operate as it does not need tiresome registration processes and legalities. This kind of business belongs to the owner, and he or she enjoys all the profits and liable for all the liabilities incurred in the business. This kind of entity suffers most from unlimited liabilities due to its single operation in nature. In case the owner fails to the owner and pays his creditors in the course of operating the business, the creditors can go and claim the debt from the owner’s assets.
Partnership
In this type of business setup, two or more people come together with one business idea and pull up resources together to run a business. Their partner and the business becomes one of their own. There are two forms of partnership-
General partnerships that may look to be one person although are owned by more than one person, unlike sole proprietorship. In a general partnership, the owners also suffer from unlimited liability. The second type is of the partnership business is a limited partnership. In this form of a business partnership, some partners or all of them can have limited liability and an not be affected by unlimited liability.
Corporation
This is a type of business that is fully and operates independently. It legally separates the identities of its owners or who owns it or runs it. The ownership is usually is represented by several shares of stock. This type of business has limited liability, and partners must not necessarily or directly involve in the daily operation of the business. It is operated by a group (board of directors) elected by the shareholders of the business.
Limited Liability Company
This is a hyper form of Business Company that has characteristics of both a corporation and partnership businesses in nature and is not incorporated. It is a corporation because all of the partners enjoy limited liability.
Cooperative
This is a unique type of business. It is a private business organisation owned and controlled by people for their mutual benefits and gains. They are called members and are benefitted by the goods and services offered by the cooperative. All members are expected to help run the business as the cooperative’s main motive is to provide service to all the members and not only return on investment or profits from the business.
What types of business do we have?
These are classified into four types:
Manufacturing
Businesses involved directly in the manufacturing products, and the product are sold directly to its customers or through intermediaries. These are like cement factories.
Service
A business that deals with selling or offering intangible goods and services to the consumers cannot be stored or separated from the provider due to their intangible nature, but the outcome can be realized. Examples are salons, schools, consultancy, among others.
Merchandising
This is a middleman business idea where he or she acts as the bridge between the production company and the market or the consumer and sells the goods at a retail price higher than the factory price. An example is grocery stores, supermarkets, distributors.
Hybrid
This has both the idea of Manufacturing, Merchandising and service industries. Like a situation of a restaurant makes it is own ready to eat food (manufacture) and serve (service) his dish with juice made from another production company (merchandising) and finally make a profit out of the three.
Does government benefit from the business, and how should government support a business?
The inner activities of government defined as impact and influence roles. The broader point is that a country can benefit if there is a closer interface between the private and public sectors. Governments’ roles in business are inevitable; most constitutions provide the governments’ power to regulate various commerce and operations within their territories. Even the governments’ role had been currently maximized over time, and the business community still enjoys some levels of immunity. The government exercises its authority in the following ways to support businesses:
Permission to Form and Operate
Almost all businesses are required to register with the government authorities to the functional since the corporations need a charter and other forms of legislation as required by the state law. The document typically defines the business owner’s financial liabilities, and it also restricts the risk to the amount that they usually had invested in that specific business. Additionally, registration enables the government to monitor the business effectively.
Creating and Enforcing Contracts
Occasionally, businesses’ contact with other companies may be sophisticated or even simple. Therefore the government normally enforces such contracts, and businesses can sue each other in search of justice. The government supports activities by providing a transparent justice system that helps implement the policies to ensure that various activities exist in peace.
Businesses and Consumer Protection and Safety
The government also plays a role in ensuring that both the businesses and their clients are safe and protected. In case a business fails to oblige the guarantee, the customer has recourse in the law. Moreover, the government also imposes labeling to marketers.
Environmental Regulations and Protection
It is the government’s role to regulate the industry and protect the business and public from environmental externalities and harm.
Investor Rights and Protection
The government mandates that businesses make their financial information public, thus protecting the rights of investors and enhancing further investment. This is overall conducted via filings with the government authorities. Such fiscal information can also help the government to assess the companies that require financial assistance.
How business interacts with government
Various actions by the government, in addition to laws and regulations, considerably impact businesses’ fiancés. Processes to manage their relationships with government are overall less reliable compared to ones used to maintain relationships with other stakeholders. Even though most government actions are less likely to have an impact, others are observed as more likely to have a positive than a negative effect on businesses’ finances. There are notable regional variations in government actions.