How To Set Up Business Basics | ENTRE Institute Reviews

 

What is a business? Well, in the most strict sense, a business is defined simply as an entity or organisation engaged in business. Businesses may be personal or non-commercial entities that perform personal, commercial, or non-commercial activities for profit. They can also be governmental organisations or private foundations that are established to fulfil a specific purpose. The activities of business therefore cover all areas of activity from production to distribution.

The basic function of a business organisation is to produce and distribute goods in the market. The goods that are produced can be capital goods like machinery or plant, products like raw materials, capital goods such as equipment, furniture, and advertising and marketing materials like books, pamphlets, brochures, and other literature. Business organisations may also deal with the retail sale of goods, hire other people to sell their products, and hire storage facilities to store the production and distribution materials. When a business incorporates new employees, it not only extends the range of its operations but also takes on new members to complete its operations.

A business firm, on the other hand, is a legal entity that owns, manages, and controls the means of production of the business. The main function of a business firm is to make sure that the production of its goods and services meets the needs and demands of the public. If the public requires a product that the firm can supply, it hires employees who perform specific tasks to make the supply of the service possible. Other procedures like production of raw materials, tools, and furniture are carried out by the firm to ensure that these important business activities are performed in the most efficient manner possible.

In a very real sense, everything that is done to make goods and services obtainable to the public is a cost that is incurred by the firm. Although there is no gain without a cost, virtually every business firm realizes that profit is the ultimate reward for all of their activities. Profit is the reward for workers who work hard to produce a product that the public wants and can afford. Profit is also the reward for investors who take their risk and invest in a business in the hope of gaining a return on their investment. Without profit, a business firm would quickly dry up because it would not be able to pay its bills and maintain its offices.

The profit motive then drives all economic activity. Without this driving force, there would be little business activity. There would be no investment, no supplies to keep the factories running, no tools to create the goods to be sold, and no employees to pay for the services rendered. With no economic activity to support these activities, the viability of the business firm is threatened.

A perfect example of the threat of economic ruin can be seen in how eBay managed to survive during the dot com bubble. eBay was started as a way for people to buy and sell things on the internet. Many businesses joined early on, creating listings for their goods to be sold. This was considered a great business opportunity for people who were looking to get into the internet business but who didn't have much money to invest. By offering a relatively low cost service and an easy-to-use interface, eBay was able to attract many users. It grew to become one of the most popular sites on the internet and is still doing quite well despite the recession and slow economy.

Another example of how profit is king is in how many businesses conduct business today. For example, large corporations rely on the legal structure of partnerships in order to protect themselves from lawsuits. A partnership delivers many benefits to business owners, and it allows them to shield themselves from both personal liability and corporate liability if their product or service does not meet acceptable quality standards. Other businesses use corporations to avoid personal liability if they create a product or service that causes consumers harm. Corporations are also a tool many businesses use to protect themselves from government regulation.

If you want to start a business, you should know about how to set up a partnership or a corporation. Both partnerships and corporations deliver value to the business owner, and it is often best to choose a business structure that protects the business owner's assets. A partnership will require less management than a corporation, while a corporation will require more management and taxes. A partnership can be set up quickly, whereas a corporation requires a lengthy process. Regardless of what type of business structure you select, both partnerships and corporations give you the ability to protect yourself against lawsuits as well as giving you the power to choose legal structures that deliver value to your business.