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Businesses)
Business refers to at least three closely related commercial topics. The first is a commercial, professional or industrial organization or enterprise, generally referred to as "a business." The second is commercial, professional, and industrial activity generally, as in "business continues to evolve as markets change." Finally, business can be used to refer to a particular area of economic activity, such as the "record business" or the "computer business" (see Industry). This article is concerned primarily with the first definition of individual businesses, but also contains links to general business and management topics, in the sense of the second definition.
Individual businesses are established in order to perform economic activities. With some exceptions (such as cooperatives, corporate bodies, non-profit organizations and institutions of government), businesses exist to produce profit. In other words, the owners and operators of a business have as one of their main objectives to receive or generate a financial return for their time, effort and capital.
Types of Businesses
There are many types of businesses, and, as a result, businesses can be classified in many ways. One of the most common focuses on the primary profit-generating activities of a business, for example:
- Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers.
- Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to other businesses or consumers. Organizations ranging from house painters to consulting firms to restaurants are types of service businesses.
- Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalogue companies are distributors or retailers.
- Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals.
- Financial businesses include banks and other companies that generate profit through investment and management of capital.
- Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies.
- Utilities produce public services, such as heat, electricity, or sewage treatment, and are ususally government chartered.
- Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.
- Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs.
There are many other divisions and subdivisions of businesses. The authorative list of business types for North America (although it is widely used around the world) is generally considered to be the NAICS, or North American Industry Classification System. The equivalent European Union list is the NACE.
Business and Government
Most legal jurisdictions specify the forms that a business can take, and a body of commercial law has developed for each type. Some common types include partnerships, corporations (also called limited liability companies), and sole proprietorships.
Business and Management
The study of the efficient and effective operation of a business is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, service management, and information technology management.
Business topics
This encyclopedia includes over 1600 business and economics articles, so not all appear listed here. This lists some of the main branches of business. For more specific topics, look at the various sublists.
Last updated: 10-23-2005 03:46:01
