Introduction to business

At the beginning of civilization, people were exchanging goods. It is known as the barter system. But after a long time, people understand the value of the product. As a result, they found out currency or money. They started trading goods in exchange for currency or money. It is known as a business.

Business:

In simple terms, all legitimate economic activities to make a profit are called business. In brief, Business is all the economic activities including production, purchase and sale, related and service delivery through the financial exchange to make a profit.

Characteristics of business:

Earning profit: The main purpose of every business is earning profit. Every organization or individual runs different types of operation to earn profit for the business or own self.

Freedom: An owner or a business entrepreneur is free from all kinds of the boundary. The entrepreneur is not liable to any person rather own self. The owner can make a decision as soon as possible for the emergence of the business.    

Self-employment: A business is a source of self-employment or self-earning. A government can't manage the job for all citizen. So the business will play a great role to manage income for an individual.

Social organization: A business is being considered as a social organization. Because it plays a vital role in society. Though the business has run based on earning profit tendency but still they serve society by providing goods and services, satisfying consumer needs and demands and creating a job for unemployed people.

Engagement in economic development: A business has also played an important role to improve the economic condition by producing goods and services. Products and services made in business are treated as GDP.   

 Types of business:

Based on ownership:

Small business: A sole proprietorship is a business run by a single owner. It is the most popular form of business due to easiness of starting and freedom of running.

Partnership: According to partnership act 1832 (4), When more than one person conducts a business based on a valid contract to make a profit, it is called partnership business.

Company: Company is a form of business that belongs to the large-sized organization. According to the company act, a company should be registered to the stock exchange or responsible authority. Basically, the company has been classified into two categories, such as public ltd and private ltd company. A private limited company should have a minimum of three shareholders and a maximum of seven shareholders. But a private limited company should have a minimum of seven shareholders, and maximum shareholders are being determined by the number of shares has issued.

Government-owned: The government runs a business in a nation to provide service to the citizen of that nation. Basically, they run business to control the monopoly market and solve the problem of the nation. 

Based on size: The business has been classified into four categories based on size. These areas following.

Types of business	Employee	Turnover
Micro	0-9	No more than € 2 million
Small	10-49	no more than €10 million
Mid	50-249	no more than €50 million
Large	250+	more than €50 million

The environment of business:

Environment is an important issue for each business. It supports the business and affects the business also. So a business also needs to focus on changes in the environment and accept the change. Basically, the business environment has been classified into two categories such as macro and microenvironment.

Microenvironment: The environment is closely related to the business and does not influence all businesses involved in the industry is known as the microenvironment.

Elements of microenvironment:

Customer: A customer is a person who purchases the product from shop or organization. So their demand is affective the business mostly. Their bargaining power affects the pricing strategy.  

Supplier: Suppliers are an individual or organization who provides raw material or finished goods to the organization. Their bargaining power affects the cost structure.  

Competitors: Competitor creates challenges for the organization to adopt the change of the business environment. They create scare of resources of the organization.  

Market: A market is a place where buyer and seller meet to exchange their needs and demands. So a good market indicates better trade.

Organization: Owner, manager, the employee is playing a vital role to influence the organizational structure.

Intermediaries: They are making a bridge between the manufacturer and the consumer.

Macro environment: The macro-environment is significant external and uncontrollable factors that influence the decision-making of an organization and affect its efficiency.

Elements of macro environment:

Socio-Cultural Environment: Social ideals and the environment of the community play an enormous role in the development of humanity. Thus, as the social climate changes, it may have a direct or indirect influence on the organization.

Technological Environment: At a time when technology is continuously evolving, the company must keep up with the changes. Technology is not only restricted to computers and IT facilities. It includes goods, development methods, procedures, etc.

Economic Conditions of the Market: There is a very close relationship between the economic circumstances of the economy and the success of the company. The company depends on the market for all its products and output factors. It also sells its products and services in the same market.

Ecology and Physical Environment: Ecology and the physical environment play a significant role in the success of every company. This is particularly true of manufacturing/production firms. Take the case of global warming.

Political and legal factors: a country's political system is a blend of three branches of government – the legislative, the executive and the judiciary. The political climate of a nation would focus largely on the political views and agendas of the ruling party at the state and central levels.

Above element has impacted the business to change the strategy and take a vital decision.