What is Business

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Business Definition

A business is an activity, occupation, system or method that aims to obtain an economic benefit, generally through the realization of activities of product production, product marketing or service provision, which benefit people or other businesses.

In this case, examples of a business are a web page where free information is provided and income is generated through the placement of advertisements, the purchase of a house, and its subsequent rental, and the purchase of clothing in a market wholesaler, and its subsequent sale in a clothing store.

But also, a business is an entity created with the purpose of obtaining an economic benefit, generally through the realization of activities of production of products, commercialization of products or provision of services, which benefit people or other businesses.

In this case, examples of a business are an automobile factory " business dedicated to the production of products ", an auto parts store " business dedicated to product marketing ", and an automotive mechanic workshop " business dedicated to the provision of services ".

Difference between a business and a company

The difference between a business and a company is that a company is also an entity created in order to obtain an economic benefit, usually through the realization of product production activities, product marketing or service provision, which benefit people or other companies; but not an activity, occupation, system or method that aims to obtain an economic benefit.

That is, although sometimes the term business is used only when it's a small business such as a clothing store, a restaurant, or a clothing workshop, and not when it's a large company such as a car factory or a telephone company, the truth is that a business and a company are the same if we take into account the second definition we gave of a business.

To better understand the difference that exists between a business and a company, let us suppose the case of a person who is buying wholesale clothes in a wholesale market, and then selling it at retail in a clothing store.

In this case the activity of buying clothes and then selling it's a business, since it's an activity that aims to obtain an economic benefit; While the clothing store is also a business, but also a company, since it's an entity created in order to obtain an economic benefit.

Types of business

There are different types of businesses, since businesses are usually classified according to various criteria, such as their size, legal form and scope of operations; However, the main classification that's usually made to businesses is according to their main activity, which can be:

Extractive business

Extractive businesses are businesses dedicated to the extraction of natural resources, whether renewable or non-renewable.

These businesses are usually medium or large, and have several material resources specially made up of machines and equipment necessary to carry out their extraction activities.

Examples of extractive businesses are agricultural companies, livestock companies, fishing companies, mining companies, logging companies, oil companies, etc.

Producing or manufacturing businesses

Producing or manufacturing businesses are businesses dedicated to the production or manufacture of products; that is, the transformation of raw materials or inputs into products destined for sale " final products ".

These businesses also tend to be medium or large, and have several material resources specially made up of machines and equipment necessary to carry out their production activities.

Examples of producing businesses are car factories, food factories, furniture factories, textile factories, etc.

Retail sales businesses

Retail sales or retail businesses are businesses dedicated to the purchase of products in quantity, and their subsequent retail sale.

As main characteristics, these businesses usually have a physical warehouse where an inventory is stored, and a place where the products are offered and promoted to the public.

Examples of retail businesses are clothing stores, appliance stores, auto parts stores, hardware stores, warehouses, bazaars, pharmacies, etc.

Wholesale business

Wholesale or wholesale businesses are businesses that act as intermediaries between the producer and retail businesses.

These businesses buy products in quantity from the former, and subsequently sell them, also in quantity, from the latter.

Examples of wholesale businesses are beverage distributors, food distributors, construction materials distributors, etc.

Business services

Service businesses are businesses dedicated to the provision of certain services, either to individuals or to other businesses or companies.

These businesses usually have material resources specially made up of equipment necessary to provide the services, and human resources made up of workers also dedicated to providing them.

Examples of service businesses are restaurants, hotels, beauty salons, gyms, medical centers, law firms, travel agencies, real estate agencies, construction companies, banks, schools, consultants, clothing workshops, repair shops, etc.

Online business

Finally, there are online businesses or businesses on the Internet, which are businesses that operate or are carried out exclusively through the Internet.

In addition to operating or performing over the Internet, other characteristics of these businesses are that they usually have a website and, unlike other types of businesses, they don't usually have a place to produce or sell products, or provide services.

Examples of online businesses are websites or blogs that generate income through the placement of advertisements, online stores, affiliate programs, etc.

Requirements for a successful business

To finalize this article, let's see below the requirements that a business must meet to be successful:

Offer a very good quality product

Nowadays where consumers are increasingly demanding, the main requirement that a business must meet to be successful is to offer a very good quality product.

A product of very good quality could imply, among other things, a product that uses or is made of first-rate inputs, that has an attractive design, that's durable in time, and that fully fulfills the functions for which it was created.

Provide excellent customer service

Nowadays, where consumers like to make them happy, and they have no problem going to the competition if they feel they have been treated badly, it's useless to offer a very good quality product if it's not accompanied by excellent service to the customer.

Providing excellent customer service could involve, among other things, providing friendly treatment, providing prompt attention, providing personalized service whenever possible, having a pleasant environment that makes the customer feel at ease, etc.

Have a differentiation

To be able to stand out against so many competitors that today exist in the market, another requirement that a business must meet to be successful is to have a differentiation; that is, with something unique and novel that allows it to distinguish itself from other competing businesses.

A differentiation could be, for example, a function of the product that the other competing products don't have, an extra service that the other competing businesses don't offer, a more efficient order taking or product delivery system, etc.

Constantly innovate

Finally, today where the life cycle of products is getting shorter, for a business to be successful another important requirement that must be met is to constantly innovate.

To constantly innovate implies to constantly create and launch new products " which don't necessarily have to be totally new, but could also be products that are already available, but with new features "; but also constantly create and apply new production processes, new ways of serving the customer, new promotion strategies, etc.

Summary

In summary, a business can be an activity, occupation, system or method that aims to obtain an economic benefit " for example, the purchase and sale of clothing ", but also an entity dedicated to obtaining an economic benefit " for example, a clothing store ".

The difference between a business and a company is that a company is also an entity dedicated to obtaining an economic benefit, but not an activity, occupation, system or method that aims to do so.

Depending on their economic activity, businesses can be classified as extractive, producers or manufacturing, retail or retail, wholesale or wholesale, services, and online or online.

Finally, for a business to be successful, the main requirements it must meet are to offer a very good quality product, provide excellent customer service, have a differentiation, and constantly innovate.


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