Home Business & Management What Is Business? Excellent Detailed Review - 2020.

What Is Business? Excellent Detailed Review – 2020.

Want to learn about business? You have come to the perfect place. Though in this blog you will learn about the history, types, forms, and objectives of business.

A simple definition of business is nothing but a system of organization that sells its product or service to earn profit called profit-making organizations.

However, an organization is not always to make a profit, some are also working for no profit, these organizations are called non-profit organizations.

Additionally, Check out this video and some of our blogs on how to start a business, 10 business ideas to work from home and business vs job

What is business?

In today’s world, there are many kinds of businesses everywhere moreover, every person directly or indirectly engages with companies in some way or the other.

For example –:

A person who wants to buy groceries, either makes a purchase through a brick and mortar store or an online market places, both of them are firms eventually.

They provide products and services to you to earn a profit.

shelf of a grocery store containing vegetables

Another example is of a grooming services, be it hair cutting or a beard shave, to get the service everyone goes to a barbershop, a barbershop is nothing but an organization that provides its hair cutting service to earn profit from it.

grooming business , a man getting a haircut.

Things to learn-:

  1. What is business?
  2. History of business
  3. Types of business
  4. Forms of business
  5. Objectives of a business
  6. Examples
  7. Conclusion
  8. FAQ’S

1. What is business?

The simple definition of business is a set of organizations working to sell goods or services with a profit motive.

In other words, It is anything in which an individual or a group provides or sells commodities or services to earn profit.

Firstly, there are millions and millions of registered and unregistered companies in the world. Ranging from the shoe industry to designer clothes to interior and furniture etc. and many more. But most of them are created for commercial purposes.

Industries are categorized under three categories -:

  1. Small-scale.
  2. Medium-scale
  3. Large-scale

SMALL SCALE-:

First, small scale businesses are those which operate on very little margins,

It covers the majority of the businesses in the world, and have very little turn over of less than 1 crore.

They also have very little revenue numbers, with an employee range of 1-10.

Small scale businesses can vary from small vegetable vendors to small pot makers and many such related ones.

These are small firms and they also do not have a legal structure.

They do not have a business plan as well.

MEDIUM SCALE-:

Second, medium scale industries overall have to face a lot of competition to survive in the market.

They have an employee range from 10 – 50 employees.

They make a turnover of not more than 30 crore.

Moreover It may vary from industry to industry be it cloth industry to paper industry.

LARGE SCALE-:

Third, large scale industries are of very few in number but are the most stable, they have an employee number of more than 50

They have assets of more than 10 crores and turn over can be more than 100 crores.

These industries vary from manufacturing to services to oil and gas to pharmaceuticals.

IndustrySmall scaleMedium scalelarge scale
investment less than 25 lakhsmore than 25 lakhs but less than 50 lakhsmore than 50 lakhs
turnover of the companyless than 5 croresmore than 5 crores but less than 30 croresmore than 30 crores
use of effective technologyuse of traditional practices and no use of technologymixed use of traditional practices as well as technologyhighly engaged with technology and most of the processes being fully automated
Differences between small scale, medium scale and large scale

2. History of Business.

Though there have been businesses in existence for centuries, however in every century, every era there have been different types of them.

Since the existence of humanity, Something basic seen is the changes in businesses of different eras.

For instance, earlier in the ancient civilizations businesses existed but they worked under a different approach of trading known as the barter system.

The barter system is a system of exchanging goods and services for goods and services without any common medium of exchange, this system was later replaced by a common medium of exchange known as money.

Additionally, after an official medium of exchange was adopted all over the world, firms that have adapted to the shifts in processes have shown a greater chance of success.

history logo depicting business history

In the earlier days businessmen used a traditional medium of practices, where business processes were done by humans however now with the introduction of the internet and many other technologies, companies have changed processes completely.

Though they now have started to go online which means that with the help of the internet, businesses can expand their customer base and get proper feedback.

With automation and with the help of emerging technologies many repetitive tasks and many jobs have been eliminated, the history has been very unpredictable, the future is technology.

However, the success of a company lies in the fact that how it can adapt to newer technology and change its processes.

3. Types of Businesses.

There are three types of business.

1. B2B companies-

B2B means business to business, so there are two types of people who buy a product.

On the one hand, the consumer who consumes the product and does not matter if he uses the product or no and on the other hand, is the user it purchases the product or service and uses it and is the end-user of it.

In the b2b market, an organization sells its product or service to a consumer and not a user who purchases the product to not use it and eventually wants to sell the product or service.

For instance, if a furniture manufacturer wants to sell its products, it will sell it to different distributors and retailers who have the intention to sell the products to the end customer.

2. B2C companies –

B2C is known as business to customers. In other words, anything which sells the product or service directly to the end customer which in turn uses the product or service is known as b2c.

For example, if someone wants to buy a couch it will go to a store that offers good couches and chairs that is a b2c firm.

3. C2C companies –

C2C is known as customer to customer .

In other words, here the customer has already used the product and sell the product to another customer who wants to consume the product or service, nowadays mediums like olx and quikr are a great point to do c2c business.

BUSINESSES CAN HAVE DIFFERENT TYPES ALSO.

IT CAN BE PRODUCT BASED OR A SERVICE BASED TOO.

4. Forms of Business.

There are 4 forms of business

1. SOLE PROPRIETORSHIP

business owner selling coffee

Firstly, A sole proprietor firm is where one single person is responsible for business ownership. It has a very low operating cost and it’s the easiest to set up.

A sole proprietor owns unlimited liability, in short, a creditor can go for the assets of the individual in case he does not pay up the debt.

2. PARTNERSHIP

A partnership firm is owned by more than 2 individuals. But being a partner means the profit or loss of a firm is divided.

A partner is also accountable to unlimited liability.

3. CORPORATION

A corporation is a type where the legal entity is in different hands other than the owners. The owners have limited liability but have fewer controls in the organization.

This means that shareholders can take profits through dividends but are not liable to any losses.

4. COOPERATIVE

Finally, Cooperative is an organization where it is established by many individuals for mutual benefit. For example cooperative housing society, cooperative bank.

source of the data by entrepreneur.com

5. Objectives of a Business.

business objectives on a tree

There are many objectives in a business but i have explained 5 of them

1. PROFITABILITY-:

First and foremost, one of the most important objectives of any business is to be profitable. By definition it is an organization that sells its product or service for profit. The main goal is to earn profit eventually.

2. SATISFYING NEED OF A CUSTOMER-:

Secondly, A company always intends to provide satisfaction to its customers be it in the form of a product or a service. if the customer is satisfied, the firm will grow and sustain and eventually can be profitable.

3. STAYING AHEAD OF THE COMPETITION-:

Further, Every sustainable company faces competition in some way or the other, therefore one of the objectives of a firm should be how it can be ahead of its competition by making better products or services, giving customer satisfaction, implementing better technologies, etc.

4. GAINING POTENTIAL CUSTOMERS-:

Profit is not generated through the air, Though it is solely dependent on how many customers buy our product or service, profit is generated through sheer determination and hard work, therefore another big objective is to gain more and more customers so that the business can grow.

5. FAIR WAGES TO EMPLOYEES-:

Last but not least, Companies don’t work on their own, they expand because of the teamwork of its employees.

Employees are an important part of an organization, therefore, an important objective of any firm is that its team works together in unison, for that an important motivating factor is employee salary.

Therefore, The company should give fair remuneration to their employees to get the best from them. A fair salary will motive the employees to work harder and indirectly it will help the business to achieve its goal.

objectives of a business infographic

In addition If you want to learn more check out the source.

Example-:

1st

B2B example

A manufacturer of consumer goods

For instance,

First, Maggi noodles, Firstly, Maggi noodles you eat do not come directly after it has been manufactured. It has to go through various distribution networks to get to you.

Starting from the manufacturer sells it to the distributor which later sells it to the wholesaler, then the wholesaler sells it to the retailer which are usually supermarkets, and then it reaches you that’s how businesses work.

noodles in a bowl with a fork

So the manufacturer, the distributor and the wholesaler do b2b because they do not consume the product but they still buy it to sell it further

2nd

B2C example,

For instance,

B2C companies are everywhere in our locality easiest example of b2c is any grocery store or supermarket.

Though in the united states, in a supermarket goods are sold directly to the person who wants to consume the product, again taking the above example of the famous Maggi noodles, because the wholesaler has provided noodles to your supermarket you have got the noodles so the supermarket is the retailer.

COMPARISON BETWEEN A PRODUCT AND A SERVICE -:

DifferenceProductService
DurablePhysical and durableIntangible and perishable
IntensityCapital intensiveLabour intensive
PatentA product can be patentA service can’t be patent
ReusabilityA product can be reusedA service cant be reused
comparison between a product and a service by quora

6. Conclusion-:

In conclusion, Business is an important form in our life, without it there would be no jobs and likewise without jobs, no one would have income

Above all, Anyone can start a business if he/she has a passion for it and do have proper knowledge with proper market research In the industry they want to do entrepreneurship.

Most importantly, there are many successful ones out there and many more failed ones too to be remembered, In addition, only those have survived which are always determined to grow ahead and also keep wanting to add more and more customer value.

Lastly, I would like to conclude that in this blog we have given the meaning of business, its types, forms along with the different objectives.

In conclusion, I would like to give a list of the top best books and top startups in India to enhance your entrepreneurial knowledge.

7. FAQ’S

1. Which business to start?

Firstly, there are many business to choose from but moreover one should from the business he is most passionate about, in which he has knowledge and is willing to work

2. Which businesses are profitable?

every business can be profitable if there is a proper team established which can work ethically,
A proper team, good execution, right strategy, good timing and a good product or service are key things to remember in making an organization profitable

3. There are how many companies in India?

There are around 3.6 million registered companies in India

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