The Purpose of Business
The purpose of business is to provide goods and services to customers. Without customers the business would not exist. However, businesses need to make a profit to survive, especially in today’s tough economic times. Businesses must find a balance between maintaining a good customer base and making a profit. If businesses are can find the solution to this problem they can be a successful business.
Basics of Business
A business provides products to customers to earn a profit. A product can either be a good or service. A good is a burger from Burger King, a Dell laptop computer, or a Toyota truck. These are examples of a good that businesses provide.
A service is an intangible product that is bought or sold. A service is massage provided by a masseuse, haircut given by a stylist, car insurance, or health insurance. Some businesses provide both goods and services like restaurants that provide food which is a good and the dining experience is a service.
A profit is earned when revenue (the money coming in) exceeds the expenses (the money going out). The goal of most businesses is make a profit but that should not be there primary focus. The purpose of a business is to provide goods and services to customers. Businesses exist to serve the needs of customers. If you have no customers, you have no business (May, 2005). Good, successful businesses who take this philosophy to heart are the companies that survive.
Metrics that are used to Measure Business Effectiveness
The effectiveness measures how well a company or business is reaching its objectives, and constantly questions as to whether the right actions being taken to meet the given objectives. A business can measure its effectiveness in different ways. For example sales can be measured in sales and is normally reported quarterly or annually. Marketing can be measured by the number of leads generated and the lead sourced revenue (leads that generate revenue). Awareness of the business...