Business means a job, profession, trade, or business activity by which products or services are offered for profit. Profit in business does not necessarily mean financial income, but it can be in any other form.
To clarify these concepts, we will first answer the question of what is the definition of business, and then explain the types of business. We hope that by reading this article you will be able to answer your questions in this regard. So join us.
What is the definition of business?
A business is an organization or company that is engaged in commercial, industrial, or professional activities. Businesses can be For-Profit or Non-Profit.
The most important resource in businesses is the use of manpower.
A business may also have a separate entity from its owner or owners, in which case the company is referred to as a “legal entity“. A legal entity (for example, a company) can own property, take out a loan, or even go to court.
What are the types of business?
Types of businesses can be classified in 4 ways, each of which is described below:
1. Types of business based on the purpose
Businesses are divided into two categories based on purpose:
- For-Profit
- Non-Profit
A significant percentage of businesses are established for profit.
Most businesses operate intending to make a profit and increase sales, but this is not a requirement. On the other hand, a group of businesses that are not looking for financial income is called NonProfit. Examples of this type of business are: Charity
Some cultural, artistic, educational and entertainment companies are political groups of social service NGOs
2. Types of business based on the structure
Businesses fall into four categories based on structure:
- Sole Proprietorship: As the name implies, a sole proprietorship is established and managed by a specific person. In this case, legal responsibilities and taxes are the responsibility of the same person; Because the business and the owner are not legally separated.
- Partnership Ownership: This occurs when two or more people invest in a business and share in the profits, losses, and ownership.
- Joint Stock Company: A joint stock company is another type of business and is called a business in which capital is divided into shares. In this case, each shareholder is responsible for liabilities and debts as much as their share.
- Limited Liability Company: It is the most common type of company in Iran, which is usually created between family members or several friends. In this case, the capital is not divided into shares and each partner is only responsible for the obligations and debts of the company to the extent of the capital he has.
3. Business types by size
Types of businesses are divided into specific categories based on size:
Small businesses with a limited number of employees are a pervasive and efficient phenomenon in the thriving economies of developed countries.
- Small Business: Managed by one person or a small group of people (less than 10 people). In this case, although the profit is low, it is enough to manage the work. Example: A family restaurant.
- Medium Business: A business that has between 10 and 100 employees.
- Big Business: A collection that has more than 100 employees. In this case, the company may decide to offer a portion of its shares to the public to raise capital. GM, a multinational company, is an example of this type of business.
4. Types of business based on the field of activity
The field of activity of companies is another criterion in the division of businesses:
There are always different types of businesses tailored to the needs of the community, government grants, and favorable economic conditions.
- Manufacturing: They produce products and offer them directly or through intermediaries to the people. Example: Steel plant
- Services: As their name suggests, these companies offer a variety of services to customers. Such as schools
- Commercial: These businesses play an intermediary role in the economy and profit by buying products at a wholesale price from the manufacturer and then selling them at a higher price to the end consumer. Example: Supermarkets
- Hybrid: They have the characteristics of two or more categories above. For example, a restaurant prepares food itself (manufactures), buys products such as soft drinks at a wholesale price, offers them to the customer at a higher price (commercial), and finally provides services to customers (service).
Examples of successful businesses
In the previous sections, we explained what business is and what its types are. In this section, we will introduce you to two successful companies, one foreign and the other Iranian.
- Walmart Company
The multinational company was founded in 1962 by Sam Walton in Arkansas, USA. Wal-Mart has more than 10,500 branches in more than 24 different countries and employs about 2.3 million people.
The superpower achieved sales of $ 559.2 billion in 2021. This sale was achieved in two ways:
- Online sales through the Wal-Mart site
- Sales in foreign countries including Canada and Mexico
Wal-Mart’s success owes much to several factors, including branding, pricing policy, optimal supply chain, financial strength, and various sales channels (including online sales).
What are the steps to start a business?
So far we have explained what is the definition of business and what are the types of business. Then we got acquainted with two successful domestic and foreign businesses. Now you may be wondering what the steps are for starting a business.
Starting a business is never as difficult and important as its success.
The steps to starting a business are:
- Find a suitable idea
- Market research
- Writing a business plan
- Capital
- Determining the structure of the business and the location of the office
- Choose the right brand
- Obtain relevant permits
- Steps to Start an Internet (electronic) business
To do this, you need to go through the same 7 steps above, but with the difference that instead of finding the right office location, you should find a good idea for your site and then your site through content production and search engine optimization methods, ie Put SEO in Google rankings in higher rankings to be shown to searchers seeking your products or services.
Also, to achieve high sales, you need to find your target market well and target it. This will be possible with different marketing and branding methods.
Conclusion
The goal is to try and choose the right strategy that determines the success of a business.
In this article, we first explained “What is the definition of business” and reviewed the types of business. Then we studied examples of successful domestic and foreign businesses and explained the steps of creating a business and business step by step.
At the beginning of the article, we promised you that by studying this content thoroughly, you will get your questions, which we hope has achieved this goal. If you have any questions about the above, please ask in the comments section to get your answer as soon as possible.
Frequently Asked Questions
What characteristics should a business name have?
- Have a meaningful connection with your field of activity.
- Be attractive.
- Not used by another company.
- Do not refer to your services directly as your services may be more or less later.
How is a business plan written?
A business plan is a formal document that sets out business goals and strategies to achieve them. This plan is necessary to attract capital.
What is the definition of a startup?
A start-up is a company that is in the early stages of its activity. Startups are founded by one or more entrepreneurs who want to create a product or service that is apparently in demand. These companies usually start with high costs and limited sales and therefore usually seek to raise capital. Some successful startups include:
- Uber: Taxi Company
- Airbnb: Rent a service directly from the landlord
- Pure Storage: Data storage and analysis services
- NJOY: Tobacco Company
- The Honest Company: Manufacturer of environmentally friendly baby accessories
- Lyft: Taxi Company
- AdRoll: Mobile Retargeting Advertising Provider
- Handy: Provides large team management software
- ThousandEyes: Big data storage and analysis service
What is the difference between marketing, advertising, and digital marketing in business?
Marketing means recognizing the needs of customers and finding ways to meet those needs.
One of the most important components of digital marketing is advertising, which involves introducing a brand or product, or service of a business by providing information through various media.
One of the sub-branches of marketing is digital marketing, which means the use of the Internet and related digital technologies for marketing purposes. Some important branches of digital marketing include social media marketing and the use of a variety of Google tools (Gmail, Google Ads, etc.).
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