Business is an activity in which goods and services are produced or exchanged for some value or price. It can be distinguished from other activities such as love and affection, religion, charity, gratitude etc.
A businessman earns profit from his business by satisfying the needs of the customers in the best possible way. In order to achieve this, he is required to utilize his resources wisely and not to waste them. He also tries to minimize the loss which may occur due to natural calamities.
In this regard, he must strive to improve his products and services by adopting modern technology. In this way, he can develop competitive advantage and increase his sales.
Profit can be defined as the difference between the cost of production and the sale price of the products. The higher the profit, the better is the efficiency of a business.
The profits of a business are essential for its survival. They are also essential for expansion and growth.
They help in attracting new customers, building goodwill and maintaining the good reputation of the company.
A company can survive only if it captures a sizeable share of the market. To do so, it must have a sound marketing strategy and should maintain it on an ongoing basis.
It is very important for a business to establish a clear and definite set of objectives, which will be the basis of its strategy and planning. These objectives must be reflected in all the functional areas of the business, including Production, Marketing, Finance, Human Resource Management and Research & Development.
Internal Functions
A business lays a firm foundation for its success by performing the following essential and crucial functions: Procurement, Accounting and Administration. These functions involve the purchase of raw materials and trading goods, fixed assets and other services. The procurement function is responsible for purchasing the right quality of material at the right price, as well as ensuring that the goods are delivered on time.
Finance
Finance is the lifeblood of business and must be carefully managed. It must ensure that adequate funds are available at all times to meet operational expenses and to invest in new projects.
It must also ensure that all expenditures are justified and that there is a net increase in the value of output, as well as a positive reduction in the cost of production.
The management of finances involves a number of tasks, including preparing budgets and forecasting financial needs into the future. These tasks must be carried out in a manner which is efficient, economical and transparent.
This is a very important function and is often handled by senior management or the Corporate Strategy division of the business. It is a necessary function as it helps the business to plan for future needs and implement those plans in an effective and efficient manner.
It is very important for a business to create an effective market strategy which will allow the business to grow and succeed in the long term. This strategy should be based on the customer’s need and the specific needs of the marketplace.
