In simple definition, a business is an entity established to provide goods and services to consumers.
An entity can specialize in providing goods, services or both to meet a particular market’s demands. Most businesses today belong to individual (private establishments) and they deal with the provision of goods and or services in exchange for money. To date, an enterprise remains a socially valuable engagement with high returns.
Categories of enterprise:
A trade entity can be state-owned or a not-for-profit owned. When multiple individuals join up to establish an enterprise, it becomes a company. Businesses today are playing a big role in improve the social and the economic standards of the states within which they are established.
Common forms of trade ownership:
There are several forms of enterprise ownership each varying by jurisdiction. Below is a highlight of the most common types of enterprise ownership:
Sole trade, commonly known as sole proprietorship, is a one person owned type of enterprise. The owner, an entrepreneur in this case, runs the business at his or her own benefit. All the assets, be it infrastructure, inventories, retail fixtures, manufacturing equipment and so on belongs to the sole trader. He or she has an unlimited liability for each single obligation assumed by the business.
Partnership is a form of business owned and run by two people who comes together with an aim of setting up an entity to provide goods and services to consumers. Every partner in this form o establishment has an unlimited liability on all losses incurred by the enterprise. There are three common forms of partnership as highlighted below:
- Limited liability partnership
- General partnership and
- Limited partnership
A corporation is an entity where the business has a different legal personality from the owners. This form of entity can be state or individual owned and operate as a profit or a non-profit organization. A corporation established for-profit yet non-governmental owned is owned and run by shareholders. The shareholders assume the responsibility of electing the board of directors. The responsibility of the board of directors is to direct the corporation and hire the management staff.
This is a form of entity owned by members. Each member has a decision-making authority. A cooperative can be a profit making entity or a non-profit establishment.
How a business is classified?
There are unlimited opportunities for investment for those willing to venture in business. Almost every activity seems to be a business these days. Below are examples of the classifications of enterprise today.
- Agriculture and mining
- Financial businesses
- Utilities businesses
- Real estate establishments
- Retailers and distributors and
- Transportation business
Agro based and mining entities deal with the provision of raw materials, usually plants and minerals. Financial businesses provide transactional services to consumers and generate their profits from capital management and investments. Utility businesses deal with the provision of services to consumers under state charter.
Real estate business is becoming one of the most flourishing entities ever known. With the current population growing, people are looking for new homes for rent and or purchase. Real estate businesses deal with building, renting and selling properties like land, homes and residential building.
Retailers and distributors are intermediaries who get good from the manufacturers and sell them to the intended consumers. They generally make their profits by marking up the price of products purchased from the manufacturers.
Lastly, the transportation enterprise is a highly growing industry in the current economic atmosphere. This type of business deals with delivery of goods and people to their respective destination at a fee.
Enterprise establishment ideas:
Starting and running your own business can be a great venture. However, there are things you need to consider before going ahead with the enterprise setup process.
Know the market:
Spend time analyzing the current market structure. This will give you an opportunity to know what is highly on demand. It would be much better if you took time to do some market studies, especially in the city around you to see how much demand for certain products are and how often customers buy them.
Get a cash flow:
Cash flow remains the lifeblood of a business. Once you get started, find ways to jump start cash flow, immediately. If you are providing services for instance, ask for an upfront deposit and the balance on delivery.
Expenses and revenues:
Determine how much you are going to spend. Determine whether the line of business you intend to start will earn you revenues, god enough for being in the business. If you are spending more than your returns on a weekly or monthly basis, you may want to restructure your options. Take time and plan well on this to avoid running into unnecessary losses.
Sales and marketing:
An enterprise is not a complete entity without sales. Remember, a business is established to make profit. To realize profits, there must be an exchange of items. Money is the most common means of exchange in trade these days. Nothing really happens until your business makes a sale.
The only way to find and increase sales is to find lead. Once you get leads, you can convert them into sales. You need to find a way to help you get repeat sales from customers. It is easy to do this. Simply create a sales and marketing channel your company can utilize.
Businesses that succeed best have a strong link with their customers. Determine ways to create and enhance customer relationship. For instance, you could ask them for feedback about goods or services from your enterprise to help you know where to improve.
All businesses must run in compliance with state laws. Check with the local authority to know what the law requires of you t setup and run a business in your location. Enterprise laws do vary depending on your state or location.
Sometimes, changing how you conduct business becomes necessary. This is so especially there is a need for the business to cope with a shift in market environment. Business transformation may be required in the following instances:
- When an enterprise wants to cut cost
- When an enterprise wants to enhance customers’ experience
- To increase market share