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Understanding Business
What is business?
A business is an organization or enterprising entity engaged in commercial, industrial or professional activities. Additionally, the purpose of a business is to make a profit while providing goods and services to consumers. Non-profit organizations are businesses that support social causes and they do not generate profits. A business has 4 basic functions:
> Production – production of goods and or services.
> Marketing – encompasses the strategies to sell the goods and or service produced
> Finance – Finance deals with the money, debt and the investors involved in the business.
> Human Resources -these are the employees and workers involved in the business
> Operations– all the production and delivery processes that need to transpire before, during and after the goods or services are provided by the business.
Types of businesses
There many different ways in which businesses are structured and classified, and they are usually classified by that means of ownership and operational structure:
1. Sole proprietorship: Owned and operated by an individual. It is very easy to form a sole proprietorship, but the owner takes on all the risks and liabilities.
2. Partnership: Owned by two or more individuals and share profits and responsibilities and liabilities.
3.Corporation: Separate entity from its owners. Limited liability but more regulations.
4. Limited liability company (LLC) :Contains elements of both corporations and partnerships.
5.Non-profit organization: Operates to benefit the charitable, educational, or social purposes of the organization and not for profit.
The Role of Business:
Business is crucial to the development of any economy. Here are a few reasons why
> Economic Growth: Business has a significant impact on GDP and provides growth in investment.
>Employment: Business generates employment and helps provide a better standard of living.
> Innovation: Technology and other advancements are often driven by competitive business environments.
>Global Trade: Business increases exports and imports, and in turn provides international relationships.
>Community Development: Business creates successful companies which often lead to investing in infrastructure, educational opportunities, and healthcare.
Trending Business Insights
The business world is ever-changing. The following list captures some of the trends defining its future:
> Digital Transformation: Cloud computing, artificial intelligence, and big data technology are transforming the way businesses work and engage with their customers.
>Growth of E-commerce: E-commerce has exploded, both pre-and especially during-and-post COVID, sparking a surge in even traditional business that want to or have no option but to, be online.
> Sustainability and ESG: Environmental, social and governance (ESG) factors are at the forefront of business strategy, as consumers increasingly demand ethical business practices.
> Remote Work: Increasingly common remote-working and hybrid models means that corporate culture and employees have higher expectations.
> Globalization and Localization : As businesses become more global, they are also deemed responsible to work in local settings almost from the ground up, and to match regional needs for personalization.
