A business is often defined as a legal entity or business entity established for the purpose of conducting commercial, corporate, or administrative activities. Businesses may be either for-profit enterprises or non-profitable ones. They can be public or private entities. A business can either be a sole proprietorship or a partnership.
The most common types of businesses are: proprietary enterprises, for-profit and the term business. A proprietary enterprise is one in which profit is generated primarily from the exploitation of a natural resource, the production of which is not licensed to anyone else, while a for-profit enterprise is one in which profit is generated primarily from the sale of goods or services to customers. Private and public businesses are generally considered distinct entities, with the former being substantially funded by the government, the latter by a private funding base.
Business that fall in the private or for-sale entity category, such as partnerships, sole proprietorships, corporations, limited liability companies, and privately owned businesses, are normally established for the purpose of providing goods or services to customers at a profit. Common examples of businesses providing goods or services at a profit are hotels, restaurants, retail shops, motels, offices, and other establishments that serve a specific area. Examples of businesses providing goods or services at a loss are supermarkets, warehouses, car dealerships, and retailers. Some examples of businesses providing goods or services at a loss are government institutions, post offices, and schools.
Forming a small business involves planning, developing a sound business plan, selecting suitable licenses, registering trademarks, and getting other necessary permits. In order to ensure that your business operations do not get stopped prematurely by local authorities, form a corporation. Before you start any small business activities, get a business plan together. A business plan spells out the basic concepts and strategies of the business in simple language.
A business plan is a complete outline of the nature and scope of the business, including a description of the products and services to be offered, a brief executive summary, and a detailed profit and loss account. A well-written business plan helps you arrive at the best possible decision regarding the nature of the business, marketing strategies, financial forecasts, working capital, and the sources of funds. A business description is a document that presents the basic information about the company, its product or service offerings, and the market opportunity.
The other two documents, which constitute the executive summary and the full business plan, must be carefully written to present an accurate picture of the nature of the business. The description should include information regarding the scope of the business, its product or service offerings, costs and revenues, and risks. The executive summary is a separate document from the business plan and is intended for the sole purpose of providing the overview of the principal facts of the business. The summary gives an overview of the nature of the company, its products and services, the current and future profits, and key risks. The key risks refer to the risks inherent in the nature of the business and may affect the operations of the business.
