The first thing that we all should know before starting any business is: What is a Business

So Let's buckle up and start the journey in business.

What is business?

In simple words, business is buying and selling goods/services for profit or it can be defined as making a living by producing or buying and selling them at profit. For example:

There are 2 persons Ram and Shyam, who both have good woodworking skills. Shyam produce furniture and sells directly in the market and his income depends on the amount of furniture he sells in the market it can be more it can be less, Shyam doesn't have to report to anyone he works according to his own will, on the other hand, Ram also produces furniture but for the company, he is employed to, he gets the fixed amount of salary every month but doesn't have flexibility in his work and even he has to report to his boss daily.

From the above illustration, we can see the difference between business and Job, where Shyam is doing his own business and Ram is employed for the company.

Different Types of Businesses

Business can be differentiated into many types but there are 3 main types of business:

  1. Sole proprietorship - As from the above example, we can understand what sole proprietorship is, Shyam who works alone produce his goods and sells them in the market is a sole proprietor.
  2. Partnership - In this type of business, two or more people come in contact and form a partnership firm. For example, Ram and Shyam both come together and runs their business, then it forms a partnership business. 
  3. Corporation - In a Corporation type of business, business owners are legally separate from the business. An artificial identity is being created where a person can claim that he is the owner of the company as he has bought the share of the company. The liability of the business is limited as there are many owners of the company. The ownership of the business is easily transferable. 

The main purpose of a business

No, it's not just about profit. The purpose for doing a business can be different for every individual: For some, it may be to fulfill their family needs, for some it might be to be financially free and there can be N number of reasons for doing a business. But the main purpose of doing a business is retaining the customers by satisfying the needs of the customers by creating valuable products or giving valuable services because if there are no customers there is no purpose of the business.

Is Business all about money?

Yes, it's about earning money but not all about money as discussed above in the purpose of the company, business much more about building trust and relationships with the customer to survive long in the market if there are no relationships with the business and even if there is no profit it will still not able to survive. Hence we can say that profit and customer satisfaction with valuable products or services are important for any business.

Hope you all have got the basic knowledge of what business is, the main purpose and is it all about money or not. Share your valuable comments. Thank You.