“Duncan Solicitors do what they say they will do, and get it done when they say they will.”
What is a business?
An organization or economic system where goods and services are exchanged for one another or for money. Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit. Businesses can be privately owned, not-for-profit or state-owned. An example of a corporate business is PepsiCo, while a mum-and-dad catering business is a private enterprise.
1. an occupation, profession, or trade:
e.g. His business is poultry farming.
2. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.
4. volume of trade; patronage:
e.g. Most of the store’s business comes from local families.
5. a building or site where commercial work is carried on, as a factory, store, or office; place of work:
e.g. His business is on the corner of Broadway and Elm Street.
6. that with which a person is principally and seriously concerned:
e.g. Words are a writer’s business.
7. something with which a person is rightfully concerned:
e.g. What they are doing is none of my business.
8. affair; project:
e,g. We were exasperated by the whole business.
9. an assignment or task; chore:
e.g.It’s your business to wash the dishes now.
10. excrement: used as a euphemism.
12. of, noting, or pertaining to business, its organization, or its procedures.
13. containing, suitable for, or welcoming business or commerce:
e.g. New York is a good business town.
Merriam Webster Dictionary
Simple Definition of business
- : the activity of making, buying, or selling goods or providing services in exchange for money
- : work that is part of a job
- : the amount of activity that is done by a store, company, factory, etc.
The activity of buying and selling goods and services:
Almost all of the definitions of a business refer in some way to the buying, selling or exchange of goods or services for a profit. However, the definitions are all very broad.
According to the definitions, it seems that all of us in some way or another can describe what we do as “business”.
So how can we be more specific?
Every business transaction has minimum two parties that is a buyer and a seller. Business is nothing but a contract or an agreement between buyer and seller. The businessman also desires to satisfy human wants through conduct of business. By producing and supplying various commodities, businessmen try to promote consumer’s satisfaction which in turn promotes repeat business.
Is the shoe salesman in Florsheim Shoes engaging in business? Yes he/she is but do they own a business? Maybe but not necessarily. He could be an employees or maybe a franchise owner (here is another area of business for another breakfast meeting) in which case yes, he would own the business.
So what differentiates engaging in business and being in business?
A Business is subject to risks and uncertainties. The shoe salesman in Florsheim assumes no risk or uncertainty. He/she arrives at work opens the new till makes up a float and commences his/her work day. At the end of the day he/she goes home and forgets about the shoe store until the next day.
The business owner assumes the risk of selecting the right location, purchasing the correct stock and stock mix, setting up the display and general presentation of the shop. He assumes the responsibility for the rent, paying the wages, insurance, advertising, phone, packaging, in fact all aspects of the physicality of the business. He then assumes the risk of calculating the number of clients he needs each day to purchase shoes in order for him to meet his financial commitments and turn a profit.
Some risks, such as risks of loss due to fire and theft can be insured. There are also uncertainties, such as loss due to change in demand or fall in price cannot be insured and must be borne by the businessman. However, unlike the employee when the businessman goes home he does not forget about the business until the next day. He lives it each and every day. When he gets home he is usually analysing the day’s business and preparing for the next day, week, months business by way of a budget or business plan.
I prefer the following definition of a business:
A business is a structure or economic system where goods and services are exchanged for one another or for money and one which operates smoothly and profitably even when the owner, principal or directors are not present. A mechanism that functions with little or no day to day input from the owner. Anything else is just a self- employed job.
Delegation of responsibility and or duties is the key to operating a successful business. Some business structures lend themselves better to delegation than others. It is very hard for a sole trader by virtue of it very name, to delegate responsibility.
Forms of business ownership vary by jurisdiction but several common forms exist:
- Sole Trader:A sole trader, is owned by one person and operates for their benefit. The owner may operate the business alone or with other people. A sole proprietor has unlimited liability for all obligations incurred by the business, whether from operating costs or judgments against the business. All assets of the business belong to a sole proprietor, including, for example, computer infrastructure, any inventory, manufacturing equipment and/or retail fixtures, as well as any real property owned by the business.
- Partnership:A partnership is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three most prevalent types of for-profit partnerships are general partnerships, limited partnerships, and limited liability partnerships.
- Corporation:The owners of a corporation have limited liability and the business has a separate legal personality from its owners. Corporations can be either government-owned or privately owned. They can organize either for profit or as non-profit organisations. A privately owned, for-profit corporation is owned by its shareholders, who elect a board of directors to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either privately held by a small group of individuals, or publicly held, with publicly traded shares listed on a stock exchange.
- Cooperative:Often referred to as a “co-op”, a cooperative is a limited-liability business that can organize as for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.
Each business vehicle has its own tax advantages and structural advantages.