✔️ Definition of business in entrepreneurship
In a general definition, we must say that business refers to an institution or investment organization that performs professional activities. These organizations can be commercial, industrial or in other categories. These for-profit business establishments necessarily work for profit, while non-profit groups operate for a charitable mission and without personal financial gain. Business ownership includes partnerships, sole proprietorships, hybrid corporations, etc. Businesses can operate on a small or large scale and have various professions in mind, from selling household appliances to providing medical services.
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✔️ What are the types of business?
After examining and explaining the answer to the question of what is business, we should familiarize ourselves with the types of businesses in order to know in which category our type of activity falls. In fact, when starting different businesses, the first issue that comes to mind is what type of business it is. Businesses can be different at different levels; But they are usually divided into four main categories:
✔️ 1. Service and service
The first type of business refers to situations where the seller of intangible goods provides activities such as assistance, advice or labor to individual customers or other businesses. Examples of this type include legal consulting firms, consulting agencies, and courier and shipping service providers. In this type of business, products cannot be stored for sale or separated from their suppliers.
✔️ 2. Produce a tangible product
In this type of business, the producer uses raw materials to make the desired product. This product is then sold directly or through third parties to the customer. Such businesses, instead of just distributing the product, produce the goods needed by the customer themselves. Some examples of this type of car manufacturing companies are beverage manufacturers, steel factories, shoemakers and tailors.
✔️ 3. retail
To better explain what business is, you should pay more attention to the third type. This type, also known as "buying and selling" business, includes a set of intermediaries who buy goods from producers and deliver them to customers. Basically they sell the product to the end consumers at retail price. Here, the profit from the distribution of the product is at the retail price, which is higher than the price it was purchased from the manufacturer. You can find a good example of this in dealing with supermarkets, brick-and-mortar stores, or tax-exempt companies.
✔️ 4. hybrid businesses
As the name suggests, hybrid businesses are created from at least two other types. Restaurants are an example of this type of business because they produce their own food, but at the same time, they buy water, soft drinks, stuff like that from other producers. In doing so, they are both a manufacturer and a retailer. In addition, restaurants also provide customers' orders and undertake a process that makes them a service business as well.
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✔️ Business features
✔️ 1. Economic motivation
Business can be easily defined as an organized business activity and as such, revolves around financial motivation. To put it better, what is at the core of every job is making a profit.
✔️ 2. Production or purchase of products
Businesses produce or buy goods to distribute in society. Of course, we mentioned that they can work both ways. It means to consider buying raw materials and machines to produce goods or buying a finished product and then by adding value to it, consider reselling the product to the final consumer.
✔️ 3. Selling goods and services
When we define what our business purpose is, we also define our defining characteristic. In this particular case, goods that have already been produced are either sold to retailers who distribute the product or sold directly to customers. Meanwhile, even services (intangible form of goods) are sold for profit.
✔️ 4. earn profit
With any business, eventually, we reach the desired profit. This is what sustains the existence of the organization in the long run and keeps it afloat.
✔️ 5. Consumer satisfaction
Beside the important principle of profitability, the main activity of an economic enterprise is to produce, provide goods and services to meet the needs of society; Therefore, the final consumer as a source of profit always plays a central role in our activity. This is why customer satisfaction should be one of the important features of a business.
✔️ 6. Continuous activity
We need to determine what the future of this business is and where it ends when we launch our own collection. Individual exchange of goods or services alone is not considered a commercial activity. Transactions must be conducted on a regular basis to be considered a business activity. So foresight and planning for continuity is another feature that we should not neglect.
✔️ 7. being legal
Regardless of the type, structure and size of a business organization, our business is official for society only if it has certain legal criteria. It must also have obtained the licenses determined by law.
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✔️ What is the purpose of business?
Among compliments and types, we also mentioned that it is important to know what the purpose of the business is. By explaining such an issue, we have actually considered the key performance indicators to guarantee our progress. If you are not familiar with this concept, we should say that KPIs are a set of performance measures that can be measured over time that are tied to a specific goal. KPIs provide goals for business teams to work towards and use these milestones to make better decisions.
It is also important to have a business plan to set your business goals. Business plans help us set up our business and get the capital we need to get started. In designing such a plan, you should consider details such as company vision, product/service information, sales forecast, cost structure, revenue stream, and more.