A business is defined as any entity or individual engaged in business, commercial, or vocational activities for profit. Businesses may be either private for-profit entities or public non-profit organizations that operate for the public good in order to meet a social purpose or further a worthy social cause. In most countries business activity is regulated by the government, which often limits the rights of the business owner and his/her profits. In some countries business ownership is not permitted and all business activity is limited to the payment of taxes. Nevertheless, many countries have free-market economies and allow business to flourish.
An effective organization should be concerned with two things: first, it must be profitable. Second, it must be efficient in its delivery of service or product to the customer. The business operations staff must therefore be trained to carry out these functions in a professional manner. Training for business leaders does not have to be expensive, but it must be consistent and comprehensive. Training in business organization must occur at both higher and lower levels of an organization, as each level performs a different function and needs to be educated in similar but divergent ways.
A business is organized around four basic units: production, distribution, sales and service. Production refers to the process of creating, buying and selling products. Disposition of waste materials, including raw materials, labor and manufacturing equipment, is another important part of production. Sales refers to the buying or providing of goods and services. A business can be categorized into different types of sales: retail, service/repair and information technology/telecommunication.
A business’s profitability is determined by the operation of its production, distribution and sales units. Profits are determined by adding the cost of goods sold to the gross profit. A business may have either fixed or variable profit. The type of profit percentage established in a business usually depends on the type of ownership structure adopted in a business.
A business that produces goods and services that are in demand today will earn profits from sales that are done on a regular basis. Fixed profit margins refer to profit maximization that takes place over time, while variable profit margins are profit figures that are adjusted for inflation. A business must determine its present value, which is the amount it would cost to buy the same amount of goods today, at a specific date in the future. Present value is calculated by subtracting current costs (including overhead costs) from future costs (including profits).
A firm that is organized properly is one that can operate efficiently and effectively under all circumstances. All aspects of the business should be well coordinated so that operations do not suffer due to uncoordinated actions or lack of focus on a particular aspect of the organization. Firms that are successful have a number of key terms used repeatedly in their organizations. These key terms, when used collectively, provide an effective framework for making decisions regarding strategic planning and also for establishing targets and milestones for individual departments or levels within the organization.
A business that is successfully run has key takeaways that can be used as a model for other businesses. These key takeaways provide a good benchmark for what an organization can do if it wants to continue to succeed and become more successful. The use of key takeaways from successful businesses can provide a template for developing a business or for measuring its success and profitability. The use of key takeaways from other businesses can provide inputs for improving the way a business operates internally, while providing inputs for measuring progress on its business objectives.
In business, key takeaways are critical for achieving long-term viability. A business cannot function in an effective manner unless certain key takeaways are achieved, such as increasing revenues, becoming more profitable, increasing customer satisfaction, becoming more innovative, and reducing cost. A business cannot achieve all of these objectives, but can come close depending on the nature of the business, the level of skillfulness of management, and the willingness of the stakeholders to cooperate with each other. A for-profit business needs to ensure that it is able to make use of key takeaways from other businesses that have succeeded in the same area and build on those strengths.