what is a bussines

Businesses goods and services

We are surrounded by businesses. We interact and transact with them every day. But what, exactly, is a business?

A business can be defined as

An organisation that provides goods and services to customers who want or need them

What are goods and services?

Goods are tangible things that are produced, bought or sold, then finally consumed. Look around your home and you will see dozens of examples, from the microwave and the ready-meals in the freezer, to the flat-screen television and Nintendo Wii console.

Services are activities that other people or businesses do for you. When you book a holiday, visit the hairdresser or eat in a restaurant you are consuming one or more services. Services are sometimes referred to as intangible, in the sense that you can’t touch or handle them.

Most businesses provide a service rather than make goods. That is particularly true of the small business sector. Take a flick through the Yellow Pages directory at home to see the many small service businesses operating nearby.

There are some important differences in the skills required to run a business making goods compared with providing services. Here is a brief summary:

Goods

Services

Requires a production location - factory

The location is where the service is provided – either physically (e.g. a builder) or virtually (e.g. telesales or via a website)

The output from production is stock – which can be transported and/or stored for future sale

Service is…