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A business is an organisation’s activity or set of actions in commercial, professional, or industrial activities. Mainly, it involves buying and selling products from one entity to another. Thus depending on the steps and process involved, a business can range from minor (sole proprietorships) to international corporations. Bakery stores and food courts are small businesses, and Apple and Walmart are examples of large-scale global companies.
Businesses can be profitable and non-profitable to an organisation or any individual (e.g. owner). Sometimes a company can also be referred to as a business. However, a company comprises more complicated and expensive setups, providing more stability and protection to the owner.
Type of Businesses
- Sole proprietorships: This type of business is a sole trader governed or operated by one person for benefits. This one or sole person is considered a founder or CEO of that business and may hire another employee. In sole proprietorships, all the operating costs and judgments are primarily dealt with by one person only. Also, the assets such as inventory, retail fixtures, and infrastructure belong in the hands of the sole proprietor.
- Partnership: This type of business is owned by two or more people who join and commit themselves with skills and responsibilities to conduct the business process. In this, partners or individuals in partnerships provide resources or assistance via money and hold corresponding shares in the profit and losses of the business. The three most common partnership businesses are general partnership, limited partnership and limited liability partnership.
- Corporation: In this type of business, the business is owned by very different personalities from the business. This type of business can be both for profitable or non-profitable intent and can be owned by government-owned or privately-owned. In privately-owned corporation businesses, the business is owned by people called shareholders. These shareholders form a committee, named the board of directors, which is responsible for taking the actions and decisions required to fulfil the company’s goals or a business.
- Cooperatives: It consists of members who share limited liability and decision-making authority organised for a profitable or non-profitable purpose. This type of business is primarily classified into consumer cooperatives and worker cooperatives.
- Franchises: This business system involves the outset of a business by using the name of some giant corporation. The franchisee owner purchases the rights from the big corporation and runs the business.
Business Sizes
Business sizes may vary from the range of small shops to international businesses like Apple and Walmart. Small-sized businesses are run by mainly one person or a small group of people. Examples of small-sized businesses can be family restaurants, clothes, bakery stores etc. In this type of business, profits are less but good enough to run the operations and working of the business further.
Mid-cap or mid-sized business involves a business with revenue generation in the range of $50 million to $1 billion. These businesses are more stable than smaller businesses. These businesses are run and owned by a group of people with refined qualities and skills. And consists of 200 to 1000 employees. Examples of such businesses can be SAS and Chalet Hotels Limited.
Larger business involves more than 1000 employees and revenue of more than $1 billion. This type of business can consist of many actions and responsibilities compared to the other kinds of businesses. This type of business can be both privately-owned and government-owned. Government officials continuously monitor its activities and operations, unlike small or mid-cap businesses.
Business Activities
The implementation of a business or a business idea involves numerous steps in it to succeed. These steps mainly involve accounting, finance, manufacturing, marketing and sales, research and development, providing safety to the product, and many more. The financial information and stats are handled in accounting. Accounting involves the steps like measurement, processing, and communication of the business information, which is connected to the department/field of finance. Further steps like manufacturing, marketing, and sales involve the production of the product and its promotion for its better reach to the customer. In the research and development and safety phase, a product is tested and designed for its best use. Minor errors in the product may lead to losses of great value to the business and the user. Thus, companies pay considerable attention to this step. Sales involve the activities regarding selling a product or service in a given period. By having the time limits, sales significantly boost the business.
Conclusion
By business definition, a business is defined as the activity or a set of activities which involves the selling and buying of an asset or product. These activities may include professional, industrial, and commercial actions during the implementation of the process. These types are divided mainly based on ownership and working of the business. Furthermore, businesses are also classified depending on the capital and well-being involved. These can be small businesses(with revenue <$50million), medium businesses (with revenue in the range of $50million to $1billion) and large businesses with revenue generation more than $1billion.
