Exactly What is a Business?
People use lots of different words to define a business. Since my blog will cover all aspects of business, I’d like to devote several blogs describing my definitions for operating a successful business.
If you are going to operate a business, let’s start by finding out exactly what it is that you are running. The general dictionary definition for a business is “the activity of making, buying, or selling goods or providing services in exchange for money”.
For me, that definition doesn’t adequately cover the key elements of a business. I think a better way of expressing the concept of business is “an organization that consistently sells products and/or services for a profit”.
An organization refers to all the people, equipment, and systems that you must have to build a business. This includes all the components, both internally and externally, of the business that a person has to deal with on a regular basis. The concept of organization is just as applicable for small businesses run by a “solo-preneur”, as it is for large companies with thousands of employees.
I use the word consistently to emphasize that you must sell your products and/or services over and over again. If you only do it once in a while, you don’t really have a business, you have what I would call a series of events.
Sooner or later, a business has to make a profit if it wants to be viable. Without some money left over from each transaction, where do the funds for future operations come from? For “nonprofit” organizations let’s use the concept of sustainability in place of profit.