1 What is a business?

When people think of business they often think in terms of large, well known, successful businesses, for example multinational companies like Shell, Coca-Cola or Apple. In fact, business is everywhere. Businesses come in all shapes, forms and sizes and sell a multitude of different products and services to highly diverse customer groups. You have come into contact with various businesses as a consumer, a client or an employee.

Described image
Figure 1  Small business word cloud

As you have come into contact with various businesses and as you have chosen to study business, you will surely have your own ideas of what the word means. In fact, business is so much all around us that most people already have an idea how they would answer the question: What is a business? Let’s start by thinking about some common characteristics of business.

Activity 1

Timing: Allow about 10 minutes

This exercise will help you think about the characteristics that make up a business.

Consider the list below and note any common characteristics that, for you, define them as businesses:

  • a branch of a national bank

  • an electricity supply company

  • a post office

  • a single person offering computing services from their own home

  • a car sales firm

  • a hairdressing salon

  • a museum with a souvenir shop attached

  • a shop that sells second-hand clothes and other goods in order to make money for charity.

Comment

Perhaps you have started by thinking about some formal characteristics of businesses, such as whether they employ staff and keep accounts of income and expenditure.

Here are some characteristics you may have listed – there will be others.

The common characteristics of the list of businesses above are that they all:

  • offer goods or services to customers

  • mostly (but not always) consist of a number of people

  • have people that work for them who will probably share some values and views about the purpose(s) of the business

  • have some income and some costs

  • are likely to need to coordinate a number of different activities undertaken by individuals

  • have owners of some sort (owners could be individuals or multiple shareholders).

1.1 Defining what a business is