What is a Business? - Explained

Image by Thomas Angermann in Flickr under Creative Commons Category

Business is a type of an organization which focused on profits. A business could have various business registration models such as, Sole Proprietary,  Partnership, Limited Liability Company, Public Limited Company and etc...

Businesses can be classified into two major categories by analyzing their business behavior. Service oriented business or product oriented business are the two major classification that a business can be classified at the very basic stage. But there are businesses which does exists in the world which focused on Services and as well as Products in their operations.

Each and every business owner runs a business with the intention to generate a revenue and to make the business sustainable and to grow the business day by day. To continue the growth and to become sustainable, each and business needs to maintain the momentum with good cash flow in the business. To make the business more sustainable and profitable, business owners needs to cater the customers well and offer a good service or a product which last longer. Business owners needs to identify the demand in the market and address the right amount of supply into the market by analyzing the supply and demand to keep the sales momentum sustainable and smoother.

When some businesses are getting successful, there are some businesses which are getting fail. There are many reasons behind a business go bankrupt or fail. Not achieving sales targets, Bad management, Bad cash flow, Bad customer service, Bad products or services could lead a business to go bankrupt or fail.

Real Life Scenarios for Businesses

Imagine that your are a farmer and you grow apples, You harvest 100Kg of apples a day. And your cost of growing 1Kg of apples will be 0.25USD, And you sell the apples in the market for 0.35USD per 1Kg. This is a business and you are making a profit of 0.10USD from every 1Kg of apples you grow.