Features and functions of businesses

Features of Businesses

Product or Service: Every business produces a product or offers a service. This can be tangible, like a car, or intangible, like a financial advice service.
Value addition: Businesses add value to raw materials by transforming them into the finished products that customers desire.
Profit orientation: A business typically seeks to generate profits. This is achieved when the revenues from selling goods or services exceed the cost of production.
Risk and Uncertainty: Every business faces risks and uncertainties, from fluctuating market conditions to changing government regulations.

Production: This involves creating a product from raw materials or delivering a service. Production is directly linked to the core business activity.
Marketing: Businesses must identify customer needs, develop the right products and communicate these effectively to potential customers.
Finance: All businesses need to manage their finances effectively. This includes budgeting, controlling cash flow, and making investment decisions.
Human Resources: Looking after employees, from the recruitment stage to training and paying wages.
Administration: The backbone of a business, handling tasks like answering emails, maintaining records, and supporting other business functions.

Sole Trader: The simplest structure, owned and operated by one person, who takes all the profits and risks.
Partnership: Operated by two or more people who share ownership and responsibilities.
Private Limited Company (Ltd): A company with its shares not available to the public, often family-owned.
Public Limited Company (plc): A company with its shares freely sold and traded to public, allowing for significant capital acquisition.

Market Demand: The demand for a business’s product or service in the market impacts all areas - production, marketing, and finance.
Technology: Technological advancements can enhance the efficiency of business functions, especially production and administration.
Government Regulations: Business functions must comply with laws and regulations related to employment, environment, etc.
Economic Conditions: The wider economic climate affects business functions, influencing sales, investment decisions and hiring.

Customers: They are the reason for the business’s existence. Their needs must be met for the business to survive and grow.
Suppliers: Businesses rely on suppliers for raw materials or goods.
Regulators: Businesses must comply with the standards set by regulators to legally operate in the market.
Competitors: They influence a business’s strategic decisions and can provide motivation for improvement.