Understanding the Definition of Business and Its Purpose that We Must Know – To fulfill
their needs, humans must work to earn income so that they can meet their needs for clothing, food and
shelter. Many efforts are made by humans to get income that can meet their needs, such as being
an employee as an office worker, or starting their own business by becoming an entrepreneur.
Starting a business for someone does not always run smoothly, sometimes there are many obstacles
that hit businessmen, whether the capital is not returning, the business is lacking interest, or marketing
methods are not quite right so that the business becomes quiet and results in bankruptcy.
However, however, of the many types of business carried out by humans, almost always have the same main
goal. What is the main goal? For this reason, for those of you who want to know
what the main purpose of a business is, in this discussion we will try to discuss business and its
goals.
We will present this discussion below!
Definition of Business
The word “business” comes from English, namely business, while the word business comes from the development
of the word busy which means busy. “Busy” in this case means it can happen to individuals,
communities or society. Interpreted in a simple context, entrepreneurship can be interpreted as
an attempt to carry out an activity or work that can benefit someone.
A business, when defined in the context of an economic entity, can be defined as a business or organization
engaged in professional, industrial or commercial activities. The aim of all these activities
is to make a profit.
Business is a commercial enterprise in the business world. In economics, a business is an
organization that sells goods or services to consumers or other businesses for a profit.
Referring to the introduction of modern entrepreneurship, entrepreneurship is an activity in the
economic field. Business in a broad sense is a general term that describes an activity and
institution that produces goods and services in everyday life.
Trade or commerce is an activity in which goods or services are bought and sold for profit. In
economics, a business is an organization that sells goods or services to consumers or other businesses for a
profit. Historically, the word business comes from the English word business, from the root
word busy which means “busy” in relation to individuals, communities or society. In a sense,
preoccupied with activities and work that brings profit.
In a capitalist economy, where most businesses are privately owned, businesses are established to generate
profits and increase the wealth of their owners. Business owners and operators are rewarded
based on the time, effort or capital they expend. But not all businesses seek such profits,
such as cooperatives trying to improve the welfare of all their members, or government agencies trying to
improve people’s welfare. This business model is different from the socialist system, where
large companies are mostly owned by the state, society or trade unions.
Etymologically, business refers to a situation where a person or a group of people do hard work that
generates profits. The word “business” itself has three uses, depending on the scope – the
singular use of the word business can refer to an economic entity, namely a legal (judicial), technical and
economic entity, whose purpose is profit or benefit. Broader usage may refer to a specific
market sector, such as the “television business”. The widest possible use refers to the
activities of the entire community that provide goods and services. However, the precise
definition of “business” remains a matter of debate to this day.
Types of Business
There are many types of businesses, and as a result, they can be grouped differently. One of
the many methods that can be used is to group businesses according to their profit-making activities.
Examples of types of business as follows:
1. Manufacturing
A manufacturing business is a business that produces products from raw materials or components which are
then sold for a profit. An example of a manufacturing company is a company that makes physical
goods, such as cars or pipes.
2. Financial companies
This one business is a business that benefits from investment and capital management.
3. Information business
This type of business is a profitable business primarily from the resale of intellectual property rights.
4. Utilities
These businesses are companies that provide public services, such as electricity and water, and are usually
funded by the government.
5. Real estate business
It is a business that makes a profit by selling, renting and developing real estate, houses and buildings.
6. Freight companies
A freight company is a company that makes a profit by transporting goods or people from one place to another.
7. E-commerce
E-commerce is business conducted online via the internet. Any commodity can be traded in
online business or business in general. There are many tools that can be used to do business
online, one of which is a website, Facebook, Twitter, Instagram, Path, blogs and others.
8. Agriculture
Agriculture is the most common industry in Indonesia. This business includes businesses such
as agriculture, plantations, fisheries and animal husbandry.
9. Industrial Companies
Industrial companies are activities that produce goods from raw materials by processing semi-finished goods
and then processing them into finished goods. Business activities in this area are value added
activities.
For example, companies in the domestic sector, small, medium and large business sectors.
10. Trade
Trade is the main branch of the economy, in which the sale of goods is carried out for profit.
Money is a measure of buying and selling transactions. For example, grocery stores,
kiosks, traders.
11. Service Sector
Service Business is a company engaged in the service sector. This company provides services
that others need. Examples include schools, hospitals, transportation and education.
12. Mining
Mining is a very profitable business because it can have a significant impact on government revenues.
For example, trade in coal, gold, oil, sand, stones for some quarrying.
13. Tourism Business
The tourism industry is a business that utilizes nature, social order, customs and art as a tourist attraction.
Types of business are
also divided into four based on their use, namely:
-
Form utility
Use of form is the activity of a commercial company that transforms and processes an object in a different
form from the original to make it more useful. to consumers. For example,
furniture companies, restaurants, bakeries, clothing, etc. Location advantage
-
Location advantage (place utility)
Location advantage is the act of a trader moving an item from one location/place to another
location/location with the aim of making the item more useful. For example, a transportation
company.
-
Time utility (Time utility)
Is the act of a trader storing products so that when a given product is not useful for consumers, the
product is stored and released again when it is useful for consumers. For example warehouses at
ports, Bulog and others. Own profit
-
Proprietary utility (use of
ownership/property)
The use of property is the activity of an entrepreneur who creates or produces and realizes his own product
or service. For example businesses, shops, etc.
Business Purpose
The main goal of business is basically to make a profit. But actually, business goals are not
only that, there are other goals as well. Therefore, to make it easier to understand the
company’s goals, the business goals are divided into two parts, viz. general business goals and
merchant business goals.
Here are some business goals:
1. Benefits
As many people know, the main purpose of starting a business is to get benefits. Almost all
companies and operators try to make a profit from the business they build. Therefore,
entrepreneurs must be smart to find ways to develop the business they are developing properly and make a
profit.
2. Company Progress and Development
Every company founded by individuals or groups really wants their business to progress and develop further.
The more developed and developed the company, the higher the profit and the more jobs.
3. Achieve Achievements
Who does not want to achieve achievements, every company that is established must have a goal to achieve
achievements. This is because the achievement is a kind of acknowledgment that society trusts
the company and that its goods and services are better than those of its competitors.
4. Pay attention to the needs of the community
The company was built not only for profit, but also to meet the needs of society. It is
difficult to meet the needs of society if there is no one who produces the goods and services needed by
society. That’s why communities and businesses are connected. Businesses benefit
from the goods and services they sell, while society can meet their needs.
5. Improving community economic growth
Community economic growth must be increased so that people are more prosperous. In addition,
the state also needs economic growth to advance the life of society and the state. Economic
growth can be achieved by starting a business venture. In short, if we build a business, the
goal of that business must be to increase economic growth, be it the economy of the community or the
country.
6. Creating jobs
The more jobs there are, the closer people’s lives are to prosperity. Employment opportunities
can be increased by building and developing businesses. The purpose of this business can be
said to be very good because it can provide income or income to other people so that someone can live a
better life.
7. Indicate the existence of the company
The existence of the company is the goal of the company. Without a business, public and
consumer trust will weaken, making it difficult for businesses to develop.
Business Goals from the Businessman’s Side
-
To meet the needs of life
Entrepreneurs must have the goal of earning income from the business they have started.
Therefore, entrepreneurs are looking for various ways to gain profits from sales so that their
living needs can be met properly.
-
Successful family life
Entrepreneurs with families depend on their business for income or income. With this income,
entrepreneurs can provide welfare for their families.
-
Continuing the family business
For some Indonesian businessmen, this is the result of previous generations, so many entrepreneurs want to
continue their long-running family businesses. Continuing the family business, companies that
have existed for a long time will not disappear anywhere.
-
Create innovation and add experience
The following traders aim to develop innovation and gain experience in the business world.
Innovation is needed in business to compete with other companies. In addition, the
emergence of innovation shows quite a lot of ideas from those who are in business.
-
Want to start own business
Entrepreneurs who build their own business should be proud because they can build their own business.
In addition, individually structured companies are free to set policies.
Business Benefits
The benefits of a business founded by an individual or business unit definitely have several advantages, namely:
-
Become a leader and boss
By creating and developing, we can become leaders or bosses. Especially if the company to be
established is self-owned, not group-owned. As leaders and bosses, we can engage in politics as
we wish. However, it would be even better if the instructions were made with a joint decision
of the company’s employees, in this case communication between employees and managers could develop
properly.
Some people dream of being manager and boss since childhood, so they try their best, but others become
manager and boss because of the company’s excellent performance. Where the desire to be a
manager and boss is important, having the ability to grow a business is also important.
-
Can manage your time well
The next obvious benefit of running a business is the ability to manage it well. This means
that we can determine when to work and when to rest. However, such problems are more common in
companies built by individuals than by groups.
If the company is structured in groups, it is better to agree on time with the group members.
This must be done to prevent misunderstandings between team members, so that innovative businesses
can develop and last longer. A thriving business indicates that an ongoing business is
generating sufficient profits.
-
Increase self-confidence
Increasing self-confidence is very important in one’s life. Basically, there are many ways to
increase your self-confidence, one of which is to build a business. It turns out that trading
can increase self-confidence, because we believe that products in the form of goods and services can be sold
in the market. The more confident, the more ideas for business development.
Therefore, business profits must be maximized as best as possible.
-
Receive rewards
Those who make business either as a group or individually, you can receive benefits in the form of gifts.
Awards can be for companies or individuals. The more awards a person receives, the
greater the consumer’s trust in the company or individual.
Consumer trust is very important for the sustainability of the company. In other words,
consumer trust is the key to business success.
-
Encouraging Entrepreneurship
The following business benefits are the birth of an entrepreneurial spirit. Entrepreneurship
is very much needed when building and developing a business. Without an entrepreneurial spirit,
it is very difficult to develop a company. Currently, businesses must be built because we can
create jobs.
-
Gain experience and understanding
The final benefit of starting a business is gaining experience and understanding. The more
experiences we have in life, the more solutions we can find to solve problems. Likewise when
building a business, business problems can be solved more easily if we already have a lot of business
experience.
Conclusion
That’s all for a brief discussion of the definition of business and its goals that we should know.
Not only discussing the definition of business, but also discussing how to do business, types of
business, what are the business functions, as well as the goals and benefits of business.
Understanding the concept of business and its goals gives us knowledge about business that we did
not know before and encourages us to know the various types of business we can do as well as to know the
advantages and risks of a business itself.
This is a review of the definition of business and its goals. For Sinaumed’s who want to learn everything
about the definition of business and its goals in science, its various types, characteristics, and other
economics-related knowledge, you can visit sinaumedia.com to get related books. As
#FriendsWithoutLimits, sinaumedia always provides the best products, so you have the best and latest
information for you.
Author: Pandu Akram
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