A business is defined as a legal entity or an entity organized for the purpose of conducting commercial, industrial, or administrative activities. Businesses may be either for-profit or non-profitable entities that conduct primarily to meet a social purpose or further an educational cause. Companies in any country are usually categorized into two main types: those which generate personal revenue and those which generate sales for a commercial purpose.
For the individual entrepreneur, the earning potential in business is only limited by his or her own talent, skill, hard work, imagination, and business acumen. Business owners who operate small enterprises earn largely on the basis of their sales and the value of the goods or services sold to others. Business profit comes from two sources: the sale of goods and services and the profit on the exchange of currencies.
Individual entrepreneurs normally sell goods and services that they need or use in their everyday lives. But some also set up manufacturing units to manufacture and distribute goods. In both cases, profits are generated through the process of marketing the product to consumers. Profits are also expected to be realized from the sale of surplus production or over-production of goods at the end of each business season or period.
Large-scale businesses engage in manufacturing, distribution, and marketing of goods. These businesses are characterized by huge investments, extensive inputs, and intensive processes. Large-scale businesses must always make sure that their costs are controlled to maximize profits. The main article on this subject discusses profit as it relates to businesses operating in several sectors.
In most countries, the word “corporation” refers to a legal entity that controls or owns a particular business. In cases of sole proprietor and corporation, the term referred to as “personnel” is used. In most countries, the main article on this subject discusses the concept of a general partnership. In a general partnership, a person represents the principal in a business while another person acts as the agent or partner in the business. The main article on this subject discusses the benefits of a general partnership.
Private companies can be categorized into either public or private in terms of capitalization. Public companies are those that are traded publicly while private companies are those that are owned by only a limited number of people or group of people. Private companies have lower costs of entry and have lower overheads. Most businesses are categorized as either public or private by the nature of the goods and services that they manufacture and distribute. For instance, the main article on this subject discusses the definition of strategic management. Strategic management is the management of an entity by the use of special forms of communication with other individuals and entities.