business

  

Definition

An organization or economic system where goods and services are exchanged for one another or for money.

Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit.

Businesses can be privately owned, not-for-profit or state-owned. An example of a corporate business is PepsiCo, while a mom-and-pop catering business is a private enterprise.


Use business in a sentence

  • The business was growing so quickly it was getting new customers faster than it could keep up with the orders coming in

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  • Fran quit her job in finance in order to start her own daycare business, because she believed she could use her skills in order to spend more time with her own children.

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  • The business which opened recently downtown went bankrupt because it did not make enough income to supplement it's needs, and therefore closed.

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Notable Quotes

  • 8 Factors Creating New Business Opportunities
    "Business opportunities arise from change, chaos, confusion, inconsistencies, ambiguity, uncertainty, ignorance, and emotion."
    - Tom Murcko
  • Think about Business as a Game
    "One way to think of business is as a board game. You can play the game as it exists, or you can try to change the game, either by changing the rules, changing the objective, changing who you're playing against, or by choosing to play an entirely different game."
    - Tom Murcko
  • 5 Ways to Finance Your Small Business
    "1. Grants: A variety of private foundations and governmental agencies offer these grants and loans, but finding one that you qualify for may be difficult. In fact, unless your product or service relates to development of a new technology or you are starting a non-profit organization, there is little to no value in looking for a grant from the federal government. State governments, on the other hand, do offer grant money to individuals. 2. Small Business Loans: Small business loans, on the other hand, are more readily available and may be a good option for you. These generally take the form of loans made by private institutions that are then guaranteed by the U.S. Small Business Administration (SBA), a federal agency that was established in the 1950s to assist small businesses. 3. Social Lending: Another less traditional financing avenue is peer to peer lending. We did not pursue this route, but it does offer a reasonable fixed interest rate for up to three years. One p2p lending option is LendingClub. To qualify, you must have a credit score of at least 660. The interest rate is based on several factors, including your credit score, loan amount, and amount of outstanding debt. One of the best benefits of peer to peer lending is that the interest rate is fixed (which provides security against interest rate increases) and amortized over three years (which forces you to discipline your spending). 4. Home Equity Line of Credit: If you need to obtain traditional financing and own your home, the best option is likely a home equity line. These loans usually offer relatively low interest rates and tax deductions. Despite the recent credit crisis we obtained, through our credit union, a $50,000 home equity line of credit with an APR below prime. If you do not own a home, discuss your options with at least three financial institutions. If you are a member of a credit union, or know of one that you could join, this could be your best option since credit unions are non-profit organizations. 5. Credit Cards: The many rewards offered by credit cards make them a viable option for funding a new small business. We used a business credit card to fund various start up costs, but we made sure to pick the right kind of card. We chose a card that offered an initial cash back and future cash rebates when we make business purchases from office supply stores and other retailers. Another option is to pick a card with a 0% APR introductory offer on purchases. There are many credit cards that have no interest for 12 months that are worth considering."
    - Dough Roller
  • Locking In Customers
    "Customer lock-in (that is, their cost to switch to another provider) is an important concept in business. If lock-in is low you're less likely to be able to retain the customer, but if lock-in is thought to be high then the initial sale will be more difficult. Where switching costs are high it's easier to get a new customer than to get a customer to switch from another provider. First-mover advantages are especially powerful in markets with high lock-in.
    The ability to detect switching costs and predict how they'll change as time passes is an important business skill. Some types of lock-in rise over time (called creeping lock-in), others fall. Here are some examples of each: contractual commitments (falls over time), durable purchases (falls), brand-specific training (rises), information and databases (rises), and loyalty programs (can rise or fall).
    For example, as a supplier, switching costs are the key to valuing your installed base. As a buyer, show the seller you understand how you'll be locked in with them, and explain what your switching costs would be from your current vendor, and use these factors to negotiate a better deal."
    - Tom Murcko
  • See Things From Their Point of View
    "Allocentrism is the practice of trying to see things from others' points of view. This is very useful in business just as it is in life. There are many possible uses: negotiation, persuasion, teamwork, sales, marketing, and just about every other aspect of business."
    - Tom Murcko
  • Planning for Your Business
    "When you begin planning, and then when you really become involved in an extra income producing endeavor, you should work it exactly as you have organized your regular day-to-day activities, on a time basis. Do what has to be done immediately. Don't try to get done in a hour something that's realistically going to take a week. Plan out on paper what you have to do, what you want to do and when you are going to do it. Then get right on each project without procrastination."
    - Unknown
  • How much power do your buyers have?
    "Take a lesson from Delphi, the giant auto parts supplier stuck in Chapter 11 despite its $26 billion in annual sales: It's no fun to be in a business where a few big customers can demand price cuts with each passing year. Meanwhile, movie theaters--even while besieged by video-on-demand and other services--still manage to push higher prices on the disaggregated masses. The cost of a seat at a Regal Entertainment Group theater in lower Manhattan is now $12--up 20% in less than three years."
    - Brett Nelson
  • Why Do Bars Have Happy Hours?
    "Why do bars offer discounted prices on drinks early in the evening? The answer is that they recognize that the crowd and not the bar itself is the main reason people go to bars, and the discounts are effectively an expenditure designed to build something of value (that is, the crowd) which they can monetize later in the evening, with those same people or with others who come to the bar only because it is popular. The general principle at work here, of incentivizing early adopters, may be applicable to your business in other ways."
    - Tom Murcko
  • Hidden Costs Count Just as Much
    "Whether you're trying to reduce your own business transaction costs or devise a new way that others can do business more frictionlessly, it's important to factor in all the costs of transactions, some of which tend to be less visible than others. These include the costs of search, information, negotiation, decision-making, policing, and enforcement, just to name a few."
    - Tom Murcko

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