Business Definition – Part II
A business is generally defined as a commercial entity or organization organized for profit, commercial, technological, or industrial activity aimed at generating income. The term business can also be used in a broader sense to include all forms of enterprises engaged in trade. Businesses may be either for-profit or non-profitable entities that perform an individual or collective action to meet a social purpose or further a public social good.
A business strategy is used to identify and capitalize on existing trends and market segments. Business strategies are often designed to achieve specific goals such as increasing customer value, expanding market share, reducing operating costs, maximizing corporate profits, and creating competitive advantages. In order to implement their business strategies, businesses must determine the primary drivers of the market, identify competitors, develop a competitive plan, and establish and maintain appropriate marketing, sales, and distribution mechanisms. Business strategies can further be utilized to promote awareness and acceptance of new technologies, promote long term sustainability, and build a company’s international presence. While these strategies are necessary to ensure the long term viability of a business, they often fail to address the immediate needs of the consumers within a market.
Every business has liability for the products or services it sells or provides to its customers. In order to remain liable for its products or services, businesses must take proactive steps to mitigate their exposure to financial risks. The development of a business strategy which includes management of liability is necessary in order to mitigate potential losses caused by legal exposure and negligence.
Technology and social media are two important tools that are used by millions of small businesses throughout the United States to increase their customer base and overall profits. Business strategies are vital for small businesses that rely heavily on technology to expand their customer base. Because technology and social media are rapidly evolving, many small businesses are currently being negatively impacted by the impact of these trends on their profit margins. Developing a strong business strategy that addresses the issues of increasing technology and social media exposure is essential in order to improve profitability and minimize the impact these trends have on a company’s bottom line.
When forming a partnership, one of the first steps a business must take is identifying partners. Identifying partners early in a partnership development process allows the business owner to focus on the business aspects of the partnership, while securing the funding sources necessary to sustain and grow the partnership. Identifying partner is also an important part of developing a strong business structure that is designed to decrease the risk of liability. In many states, partnerships are only allowed to exist between two legally registered corporations. In order to maintain liability protection for your partnership, you may want to consider registering your corporation as a limited liability company, which is also commonly referred to as LLC.
As you can see, there are a number of dynamics that must be considered when formulating a strategy or developing a business definition. These dynamics need to be addressed, because failure to do so can result in the failure of the business model. The most critical issue to address in all of the above dynamics is the need for the business model to change as the business-to-business and technology-to-business markets evolve. Rapid changes in the market place can result in tremendous profitability and tremendous losses for companies that are not ready for these changes. Developing a business strategy that is flexible, realistic, and focused on the current and future needs of your market segment is key in developing a sustainable and profitable business model.