A business is defined as a legal entity or association engaged in business, commercial, or professional pursuits. Companies may be nonprofit entities or for-profit ones which operate in order to meet a social objective or further a particular social cause. Business enterprises may employ a number of personnel such as managers, clerical workers and technicians who perform specific functions to carry out business functions. The products and services that are traded or offered for sale are the primary commodities in a business. Other things that may belong to the business are patents, real property, supplies, machinery, vehicles, trademarks, and information technology systems.
Although businesses can belong to more than one entity, the most typical examples are partnerships, corporations, franchises, business leagues, and proprietary enterprises. In general, these entities share some common characteristics such as having ownership structure, financial capabilities, and a fixed date for ending operations. However, there are key takeaways that all businesses share and these key takeaways help businesses maximize their profits. Let’s take a closer look at each of these key points:
The first key takeaway is that a business is an association of people. In most cases, the members of the business are called owners but some types of businesses are also called franchises. A franchise is a kind of agreement wherein the franchisor, or owner, licenses the use of the trademark of the business to a certain owner who then makes a series of payments to the franchisor. This arrangement allows the franchisor to benefit from the sales of the franchises yet the owner is still required to pay royalties for the goods or services that the franchise has sold. Franchises provide businesses with a fixed number of customers and therefore do not face the vagaries of the marketplace like start-ups.
Another key takeaway is that businesses should be owned by, and for the shareholders who elect the company’s directors. As much as possible, when a business is run through a corporation, the shareholders should be the ones who own the corporation. This is to ensure that profits are not only made by the corporation but also by the shareholders through dividends. Moreover, shareholders can make the most of their corporate social responsibility in that they can have a say on what goes on the business.
One more important point on which all businesses should focus on is corporate responsibility. All firms should create procedures on how they reward partners, employees, and other stakeholders that contribute to the firm’s success. In addition, a firm should reward shareholders on a regular basis so that their investment is not lost. This is to ensure that a firm continually develops and makes progress despite the pressures of competition.
Most businesses have realized the importance of education and community involvement. They know that these tactics can increase sales and profits. Moreover, they also realize that they cannot solely rely on consumers alone to help them sell their products. Consumers are only one way of reaching out to their communities and other entities. Businesses should always take advantage of this opportunity since it helps them maintain customer loyalty and keep their brand names as fresh as ever.