A business (also known as an enterprise, a company or a firm) is an organizational entity involved in

the provision of goods and services to consumers. Businesses as a form of economic activity are
prevalent in capitalist economies, where most of them are privately owned and provide goods and
services to customers in exchange for other goods, services, or money. Businesses may also be
social non-profit enterprises or state-owned public enterprises charged by governments with specific
social and economic objectives. A business owned by multiple individuals may form as an
incorporated company or jointly organise as a partnership. Countries have different laws that may
ascribe different rights to the various business entities.

The word "business" can refer to a particular organization or to an entire market sector (for example:
"the music business") or to the sum of all economic activity ("the business sector"). Compound forms
such as "agribusiness" represent subsets of the concept's broader meaning, which encompasses all
activity by suppliers of goods and services.

Businesses aim for their sales to exceed their expenditures, resulting in a profit or gain or surplus.

Basic forms of ownership[edit]

Forms of business ownership vary by jurisdiction, but several common forms exist:

Sole proprietorship: A sole proprietorship, also known as a sole trader, is owned by one
person and operates for their benefit. The owner operates the business alone and may
hire employees. A sole proprietor has unlimited liability for all obligations incurred by the business,
whether from operating costs or judgements against the business. All assets of the business belong
to a sole proprietor, including, for example, computer infrastructure,
any inventory, manufacturing equipment, or retail fixtures, as well as any real property owned by the
sole proprietor.

Partnership: A partnership is a business owned by two or more people. In most forms of

partnerships, each partner has unlimited liability for the debts incurred by the business. The three
most prevalent types of for-profit partnerships are general partnerships, limited partnerships,
and limited liability partnerships.[3]

Corporation: The owners of a corporation have limited liability and the business has a
separate legal personality from its owners. Corporations can be either government-owned or
privately owned. They can organize either for profit or as nonprofit organizations. A privately owned,
for-profit corporation is owned by its shareholders, who elect a board of directors to direct the
corporation and hire its managerial staff. A privately owned, for-profit corporation can be
either privately held by a small group of individuals, or publicly held, with publicly
traded shares listed on a stock exchange.

Cooperative: Often referred to as a "co-op", a cooperative is a limited-liability business that can

organize as for-profit or not-for-profit. A cooperative differs from a corporation in that it has
members, not shareholders, and they share decision-making authority. Cooperatives are typically
classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental
to the ideology of economic democracy.

Limited liability companies (LLC), limited liability partnerships, and other specific types of
business organization protect their owners or shareholders from business failure by doing business
 under a separate legal entity with certain legal protections. In contrast, unincorporated businesses
or persons working on their own are usually not so protected.[4][5]

Franchises: A franchise is a system where entrepreneurs purchase the rights to open and run a
business from a larger company.[6] Franchising in the United States is widespread and is a major
economic powerhouse. One out of twelve retail businesses in the United States are franchised and
8 million people are employed in a franchised business. [7]

Classifications[edit]
Agriculture and mining businesses produce raw material, such as plants or minerals.

Financial businesses include banks and other companies that generate profits through
investment and management of capital.

Information businesses generate profits primarily from the sale of intellectual property they
include movie studios, publishers, and Internet and software companies.

Manufacturers produce products, either from raw materials or from component parts, then sell
their products at a profit. Companies that make tangible goods such as cars, clothing, or pipes are
considered[by whom?] manufacturers.

Real estate businesses sell, rent, and develop properties including land, residential homes,
and other buildings.

Retailers and distributors act as middlemen and get goods produced by manufacturers to the
intended consumers; they make their profits by marking up their prices. Most stores and catalog
companies are distributors or retailers.

Service businesses offer intangible goods or services and typically charge for labor or other
services provided to government, to consumers, or to other businesses. Interior decorators,
consulting firms, telecommunications companies and entertainers are service businesses.

Transportation businesses deliver goods and individuals to their destinations for a fee.

Utilities produce public services such as electricity or sewage treatment, usually under a
government.
A system is a procedure, process, method, or course of action designed to achieve a
specific result. Its component parts and interrelated steps work together for the good
of the whole. Creating effective business systems is the only way to attain results that
are consistent, measurable, and ultimately benefit customers.

Systems are Your Building Blocks

Systems and processes are the essential building blocks of your company, whether you
realize it or not. Every facet of your businessin the store, the workshop, or the office
is part of a system that can be managed or improved by applying correct principles.
Imagine the typical business activities below as carefully designed systems, each
producing the daily results you need to be successful. Of course, you could list many
other systems and subsystems unique to your organization.

EXAMPLES OF BUSINESS SYSTEMS

Lead Generation Customer Service Purchasing

Sales Conversion Hiring Inventory Management

Website Training Shipping

Pricing Accounting Information Systems

Operations Payroll Safety

Order Fulfillment Collections Custodial

Having effective business systems is the only practical way to manage the important
details of your operation. These details are found in lower-level subsystems. For
example, your marketing system may have a subsystem called lead generation. The
lead generation system could have subsystems such as direct mail, telemarketing, or
radio advertising. Systems and subsystems are the workhorses that deliver consistent
results, even when you're not around.

A business system may be as simple as a checklist created in an hour or two. However,

more complex systems can take days or even weeks to implement. The best systems
consider such elements as design, components, people, quality, speed and
measurement.

There are "best practices" for creating high-performance business systems and
processes that pay big dividends when applied correctly.

The "Magic Formula" for Success

Good systems take waste and inefficiency out of your business and help you give
customers what they want every single time. They are the solution to weak sales
growth, low profit margins, customer dissatisfaction, poor performance, excessive
costs, inadequate cash flow, employee turnover, and daily frustration.

A systems approach to building an organization eliminates generalized solutions, seat-

of-the-pants operations, employee discretion, and everything else left to chance. These
hindrances are replaced with detailed procedures, performance standards, and
accountability. You are saying to your employees, "This is how we do it here!"

Michael Gerber said, "Organize around business functions, not people. Build systems
within each business function. Let systems run the business and people run the
systems. People come and go but the systems remain constant" (E-Myth Revisited).

Remarkable Systems are Everywhere

Our natural world is a great example of systems at worksolar systems, ecosystems,

weather systems, bodily systems, and so forth. Man has wisely followed this pattern to
solve problems and make extraordinary advancements.

In truth, the best companies are also those with the best business systems and
processes. Many highly-successful companies of our day started with one major
innovative systemMcDonald's fast food, Federal Express overnight delivery, and
Google Internet search, to name a few. These companies, and thousands of others,
have built their fortunes on one or more remarkable systems that serve customers
better than anyone else in their target market.

Now that you know what a business system is, it's time to identify yours, elevate them
to higher performance, and enjoy greater profit.

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