A business is an organization that offers products and services to its customers. It can be a sole proprietorship, a corporation, a partnership or a non-profit organisation. The primary aim of any economic activity is to acquire wealth. However, the profit-creating activities are not the core reason for the existence of any business.
Businesses are grouped according to their industry. A food business is a good example. Others are retail, technology, tourism and real estate. Depending on the goods and services offered, the nature of the business is determined.
A common misconception about business is that it is simply about making a profit. There is however, another purpose that the business has.
Firstly, a business is a systematic activity that aims to earn profits. Secondly, it can be considered to be an enterprise that aims to add value to its customers’ lives. Lastly, it can also be an institution that carries out social missions.
All businesses are different, but they all have their own objectives. Some have specific goals like gaining wealth, earning profits, creating jobs, or achieving growth.
To achieve those goals, a business must implement a strategy that will provide the desired result. Normally, it is an external function that is handled by a senior management team. Other functions include the finance function, which focuses on making money available for the business.
In addition, a business must have a vision and values. If it does not have these, then it cannot survive. For this reason, all business organisations are required to follow legal regulations that govern their operations.