A business is defined generally as an individual or organization, generally organized to engage in business, commercial, or professional dealings. Business enterprises can either be privately owned, for-profit or non-for-profit entities that operate to meet a social purpose or further an educational cause. Business enterprises may be locally based, such as restaurants and shops, or internationally founded, such as franchises of international companies. Business enterprises may be domestic or foreign-based.
Every business requires a set of skills and knowledge necessary to achieve and sustain profitability. The most important skills needed by businesses are management, marketing, and sales. Business owners seek methods and techniques to maximize profits while minimizing their total cost of ownership. To do this, business strategies vary from company to company; however, some standard practices have been identified that should always be followed by businesses.
Creating a business plan, which is a document that lays out the purposes and goals of a business, is a crucial part of ensuring that a business has a future. In general, there are two types of plans used by businesses: a business plan for a sole proprietor and a business plan for a corporation. Each has its own advantages and disadvantages, and the type of plan chosen will depend on the nature of the enterprise being planned. A sole proprietor plan focuses on the financial side of the venture, whereas a corporation’s focus is more on the legal aspects of operating the enterprise. Both plans provide a structure for funding and organizing.
Many businesses focus on providing goods or services to consumers at a profit. Common types of services provided include sales, manufacturing, services, or repairs. Although many businesses focus on one or two of these common types of services, others expand into other areas, such as financial services, professional services, or information technology. The profits created by these ventures can be used to finance additional operations.
Many businesses focus on providing a service instead of providing goods. Examples of services offered include accounting, human resources, administrative support, product design and marketing, and customer service. Businesses that offer common types of services can be classified under service businesses. These businesses may include restaurants, landscaping businesses, personal care services, and others. These businesses have a wide range of responsibilities and opportunities.
When starting a new business, many first-time entrepreneurs prefer to work with a cooperative rather than with a sole proprietorship or corporation. When forming a co-op, members pool their resources to keep the costs low and profits high. In order to qualify as a member, however, the co-ops must follow all state and federal laws, pay property taxes and have a written business plan that covers each activity the cooperative will engage in. If the cooperative does not have the capital to begin operating, then no one owns the business but the investors. Because the costs of starting a cooperative are relatively small compared to other types of businesses, more people are able to participate in a cooperative than would be possible if the business was run solely by a sole proprietor or corporation.