The organization of resources to create a goods or service that will fulfill a specific consumer demand is identified as business. Resources may include people, goods, ideas, facts and information pertaining to the running of a business. The successful operation of any business relies on the organization of its resources more than individual goals or aspirations. You can have a brilliant idea but you have to know how to put it to work in order to become a successful businessman. Better yet, you will have to master the art of working with other people to achieve the best business success. There are many types of businesses and the economy is constantly changing with newer industrial patterns. The economy of every country is different from each other, which makes starting your own business a challenging task. It is important to understand that every business idea is nurtured with the intention to improve the lives of people.
A business can surround consumer goods where physical and tangible goods are sold to the public. Cars, heaters, computers and mobile phones are examples of durable consumer goods. Food, drinks, serviettes and sweets that can only be used once are examples of non-durable consumer goods.
Consumer services are the focus of businesses that provide non-tangible products such as hotel accommodation, education services, airplane journeys, holiday packages and insurance services.
Capital goods are another form of business that relies on physical goods and services used by an industry to help in the production of other goods and services. Heavy duty machinery, commercial vehicles and industrial machines for mining are examples of capital goods.
To understand the various forms of business is necessary in realizing the factors of production. Every goods or service requires resources to operate smoothly and create the kind of impact intended. Factors of production are the resources needed by a business to produce goods or services. Depending on the size of the business, there are four main kinds of input required to gather and organize the resources essential for business activity.
Land: Land, property and all of the renewable and non-renewable resources of nature, such as coal, wind, oceanic currents, minerals, sand, crude oil and timber.
Labor: The workforce of a business consists of manual and skilled labor. Some firms are labor intensive and require more input to other factors of production such as house cleaning, tilling land, carrying goods, etc.
Capital: The finance needed to set up a business and pay for its continuous operations including the resources involved in production. Computers, machines, vehicles, factories and power plants are examples of capital goods. Power stations and airports are examples of businesses that require a lot of capital goods for smooth operation.
Enterprise: The driving force of a business is sustained by risk-taking individuals that combine various factors of production into a unit that is capable of producing goods or services effectively. An enterprise furnishes a managing, decision-making and coordinating role that can control input and output of business activity. Without a structured enterprise, even land, labor and capital would fail to produce the results that determine profitable business operation, especially as the business grows.
When you decide what the nature of your business is going to be, you must also be aware of the various business functions that align the organization of resources to create a product of service.
Most businesses consist of four main functional departments. Each department is responsible for a specific business process that encourages better business activity. Skilled and qualified people are usually hired to fill in for the roles that emerge from each business function.
The four main business functions include,
Marketing: The department responsible for market research and analysis of results that can identify and better understand consumer demand. The research and analysis of information is provided to other departments and is important in making the right decisions surrounding a product or service. Once a product or service is available, the marketing function will decide its pricing, how and where to promote it and how to sell and distribute it for sale within a target market.
Finance: The function responsible for monitoring the flow of finance into and out of the business, recording and analyzing accounts to provide financial insights that will improve business activity. Without adequate finances, effective decisions cannot be made within other functional areas, making finance a key division of any business.
Human Resource Management: HR management identifies, recruits and trains the workforce needs of a business. The HR is also responsible for integrating motivational systems that retain staff and encourage productivity in the work environment. A human resources department draws up employment contracts and covers the redundancy or redeployment of staff when necessary.
Operations Management: The business function responsible for ensuring adequate resources are available for production of a goods or service, maintaining production quality and achieving high levels of production efficiency. The delivery and utility of resources are maintained by an operations team.
Each of these functions are interrelated to ensure that the operations of a business are smooth. Effective strategic decision-making in business comes from each of the functions working closely together. Good communication and cooperation between business functions is essential before major decisions are taken.
To specialize in any job that arises from different business functions, a thorough knowledge of the nature of a business is necessary. Each department or function must maintain strong communications with other departments in order to carry out any business decision. You must have strong interpersonal skills and be an adaptive professional, determined to take the right steps in pursuit of business growth.
With a well designed enterprise and the organization of business resources to compliment business production comes the focus on sectors of an industry. The stages of production can be classified into three broad categories, primary, secondary and tertiary. These stages are involved in turning natural resources or raw materials such as oil and timber into finished goods and services demanded by consumers.
Primary sector business activity: Farming, fishing, mining, chemical engineering, oil extraction and other industries involved in extracting raw materials to be used and processed by other business sectors.
Secondary sector business activity: Firms that manufacture and process products from raw materials and natural resources, such as computers, brewing, baking, clothing and construction.
Tertiary sector business activity: Firms that provide services to consumers and other businesses, such as retailing, customer services, transport, insurance, banking, hotels, tourism and telecommunications.
There has been a reference to a fourth sector called the Quaternary sector that primarily focuses on information and technology services. Some examples could include the training and development of IT workforce, data analysis and collection, artificial intelligence research and documentation. In the case of Quaternary sector, information is the major resource required alongside the other factors of production such as land, labor, capital and enterprise. Since the concept of information is constantly evolving, many business syllabuses have not included the Quaternary sector as a definitive sector of business activity. However, there is more and more emphasis on information and technology setting the tone to modern business activity due to the rapid advancements in consumer goods that improve the access to information.
To understand the importance of sectors of industry, it is vital that a distinction is made between the growth of any particular business and its relation to the structure of an economy. The structure of an economy varies from country to country and in many places the economic structure varies from each state to the neighboring province. Although modern economics is still heavily reliant on every sector of an industry within the economy, many regions of the world dedicate more resources to one sector of an industry rather than the other. Some economies like Hong Kong are more reliant on the tertiary sector of industry than primary, resulting in a lot of imports and exports. The balance of primary, secondary and tertiary sectors in the economy is dependent on the level of industrialization in each country. The economic structure of a country is the result of the balance between each sector of the industry that fuels an economy.
To understand the economic structure of your country, keeping updated with recent business articles or columns in the local news is an effective method. In business, like any other pursuit, the more knowledge you have will only compliment your existing skill sets and an entrepreneurial mindset.
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For every aspiring business or entrepreneur, the top priority is to keep updated with the economic structure and major trends of your local economy. The knowledge of global economic trends is just as crucial to business growth in an increasingly interconnected world. The success of any business is reliant on the awareness of economic trends, the organization of resources and a persistent effort towards building a better business network. Remember, the goal of every business is to improve the lives of people that run an economy through supply and demand.
At Mpower A.S.C.E.R.T. institute, we encourage creativity and there's nothing more special than an idea that is nurtured to bring about some real change. Having undertaken numerous projects around the world, our expertise in implementing powerful business strategies sparks success. If you have an idea that can change the world, pitch your idea to our team and we will be glad to guide you along the way.
Contact us now and we will show you how to build a stronger business network and achieve the best results with your unique idea. Business, like a game of chess is about making the right move at the right time.
As buzz light year would say, "To infinity and beyond."