A business is basically an establishment in which people cooperate actively. In a very simple term, the use steroids or not business owner is the one who recruits people for work on his behalf. The business may be a sole proprietorship, partnership, corporation or even an unincorporated organization. A business also has several aspects like the financial aspect, production aspect, sales aspect and the service aspect. The production aspect includes the use of technology and tools, management of resources, etc while sales aspect has to do with the way the business delivers goods and/or services to the customers.
The aim of every business is to earn profit which is why business owners hire people who can perform various tasks that contribute to the growth of their business. The activities performed by employees are divided into those that are directly related to the business and those that are not. For example, employees who assist in the production process of the business are called business managers whereas the workers who help in the efficient handling and distribution of goods and/or services are called sales persons.
All business activities have two areas of operation; these are known as primary and secondary operations. The primary operation of a business means that what it sells and produces is what gets sold and produced. On the other hand, the secondary operations mean what the business does that is related to sales and production. Basically, everything that makes a business successful is a part of the primary operation. The sales force, for example, is what sells the goods and/or services to the customers; and the warehouse workers, who handle the storage materials and stock, are part of the secondary operations of a business.
In line with this, businesses are categorized according to their main types. Some of the common types include: family-owned businesses, cooperative businesses, sole proprietorships, limited liability companies (LLCs), partnership, service businesses, financial businesses, technology businesses, health care, real estate, and intellectual property businesses. As you can see from the list above, there are several variations in the structure of businesses. The structure of your business, therefore, depends on the type of business that you own. That is why it is important that you understand the various business structures before you open your own business.
One of the most common types of business structures is a sole proprietorship. A sole proprietorship is formed when one person owns a particular business. The person usually owns the entire business but cannot have any shares in the business. When a person establishes a sole proprietorship, he can only use his own money to finance the business. He can also choose the partners whom he will work with to help him finance his business.
Another type of business structure is a partnership. A partnership is formed when more than one people get into an agreement to work together to earn a profit. The people who are included in a partnership are called partners. A partnership means that there is more than one partner in the partnership. In addition to these general definitions, business enterprises may be further categorized into different types such as service, manufacturing, trading, nonprofit, or public enterprise.