Business is an organized commercial activity that revolves around the monetary motive of earning profit. It can take the form of goods or services and differs in size, structure and type. Businesses can be for-profit entities that return profits to the owners or non-profit organizations fulfilling a mission or furthering a social cause.
A person who operates a business is called a self-employed person, entrepreneur or businessman. The term business may also refer to the vertical industry in which a particular organisation operates such as music or food. In the context of economics, the term business may refer to a type of market such as the stock market where businesses can be publicly listed.
While there are many different types of business, the core model is simple – the exploitation of others for financial gain. It is this exploitative nature that has tarnished the reputation of business and created distrust amongst society in general. In order to rebuild trust, a few changes need to be made in the way that businesses operate.
The first is to stop treating employees like property and assuming that those who provide the finances are the company’s rightful owners. This hangover from the old days is a vestige of a time when corporate law didn’t exist and companies were considered physical assets.
Another change that needs to be implemented is to give employees the power to vote on issues facing their company. Employees should be able to weigh in on how their company is run, including the compensation policies and how profits are distributed. This will create a sense of ownership that will restore the public’s trust in businesses.
There are several different ways that a person can run a business, depending on their needs and resources. For example, a small business can be run as a sole proprietorship, which is easy to set up and register but has the downside of unlimited liability. This means that creditors can go after the personal assets of the owner if they are not paid.
Larger businesses can be run as corporations, general partnerships or limited liability companies. These are all governed by specific state laws and regulations. They can be privately or publicly owned and are often listed on the stock exchange so that investors can purchase shares in the company. There are also hybrid models of business that combine characteristics of two or more of the five core business models explained above. For instance, a restaurant can develop its own food (manufacturing), sell cold drinks that are manufactured by other businesses (merchandising) and provide service to the customers (service). The majority of the businesses today are for-profit corporations. However, there are a growing number of not-for-profits and some that are state-owned. All of them, however, should make an effort to regain the trust of the public. This can be done by taking on more of the responsibility for environmental and social sustainability and reducing the power that is in the hands of shareholders and board members.