Business is an economic activity that involves providing goods and services in exchange for payment. Its scope ranges from a sole proprietorship to massive corporations, but they all share the same fundamental goal: profit. The definition of business can get a bit fuzzy, as the term is often used to describe anything that has financial value, from stocks and commodities to real estate and even labor. However, for the purposes of this article we will limit our discussion to entities that are active in commercial or industrial pursuits.
The process of establishing and operating a business is known as business management. It involves planning and directing the resources of an organization to improve efficiency and meet business goals. Business management also includes assessing risks and anticipating cost and benefit outcomes. It is essential to the success of any organization and is a key component in strategic planning, cost/benefit analysis and business case development.
There are many different types of businesses, and each has its own unique set of advantages and disadvantages. The type of business you choose will depend on your goals, the amount of capital you have available and your ability to manage risk. The most common types of business are small and midsize enterprises, large enterprises and social businesses.
A small business is typically owned by one or more individuals who produce goods or services on a small scale and target local markets. They can be service-based, retail or manufacturing. A small business may have few employees and is usually less complex to operate than a large enterprise.
Midsize businesses are typically more complex than a small business and have a greater reach into local, regional or national markets. A midsize business may have a number of employees, production facilities and an extensive marketing program.
A large enterprise is a business that has significant revenue and growth potential. A large business can have thousands of employees, a global reach and multiple product lines. A large business may have complex legal and tax requirements.
Social businesses are business ventures that balance profit with a social or environmental purpose. These organizations are typically democratic in structure and include stakeholders beyond the shareholders, including employees, community members and suppliers. They are more likely to take risks and be innovative than traditional businesses.
Starting a business requires research, planning and a solid investment of time and money. Depending on the type of business you are looking to start, you may need city, county or state licenses. You will also need to register for sales and property taxes. Finally, you will need to determine the tax structures of your business (income, self-employment, sales and use, property or franchise), as these will affect how much you pay in taxes. You will also want to consider your liability issues, such as worker’s compensation, general and professional liability insurance. These are all considerations to make before filing for registration and officially launching your business.