Business

Business is an activity undertaken by individuals or organisations to produce, sell, or exchange goods and services, typically with the aim of making profit. A person or company that engages in this activity is called a businessperson or business. The term is also used to refer to the organisation itself, as in "small business" to mean a small company.

Business is based on exchange: one party provides a good or service, while the other party provides money or another good. Price is usually determined by the level of demand and the available supply. When production and transport costs are subtracted from revenue, what remains is either profit or loss.

Types of business

Classified by activity, business can be divided into production (manufacturing and agriculture), trade (wholesale and retail), and services (banking, transport, communications, healthcare). Classified by size, there are small businesses owned by a single person and large corporations with operations in multiple countries.

Legal structure

Common business structures include sole proprietorship (one person responsible for all debts), partnership (two or more owners), and registered company with limited liability. Limited liability means that owners are not personally responsible for the company's debts beyond their investment. Registration and tax rules vary from country to country.

Management and financing

Every business requires initial capital, which can come from the owner's savings, a bank loan, contributions from friends and family, or venture investors. Accounting is essential: records must be kept of income, expenses, and debt. Accounting helps with decision-making and tax payments.

Business in society

Business creates employment, distributes goods from producers to consumers, and generates tax revenue for governments. It also raises contested issues, including market competition, product quality, workers' rights, and environmental impact.