Open main menu

Introduction

Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services).[need quotation to verify] Simply put, it is "any activity or enterprise entered into for profit. It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to General Motors."

Having a business name does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner's personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business.

The term is also often used colloquially (but not by lawyers or by public officials) to refer to a company. A company, on the other hand, is a separate legal entity and provides for limited liability, as well as corporate tax rates. A company structure is more complicated and expensive to set up, but offers more protection and benefits for the owner.

Selected article

A Bank run (also known as a run on the bank) is a type of financial crisis. It is a panic which occurs when a large number of customers of a bank fear it is insolvent and withdraw their deposits.
Northern Rock bank run on the morning of 14 September 2007.

A run on the bank begins when the public begins to suspect that a bank may become insolvent. As a result, individuals begin to withdraw their savings. This action can destabilize the bank to the point where it may in fact become insolvent. Banks retain only a fraction of their deposits as cash (see fractional-reserve banking): the remainder is issued as loans. As a result, no bank has enough reserves on hand to cope with more than the fraction of deposits being taken out at once, and will 'call in' the short term deposits itself has made. This can cause a shortage of Market liquidity in the short term money market.

As a bank run progresses, it generates its own momentum. As more people withdraw their deposits, the likelihood of default increases, so other individuals have more incentive to withdraw their own deposits. If many or most banks were to suffer runs at the same time, then the resulting chain of bankruptcies can cause a long economic recession.

To prevent bank runs, Central banks can prevent financial institutions from failing by:

  • Deposit insurance systems insure each depositer up to a certain amount, therefore the depositers' savings are protected even if the bank fails. This removes the incentive to withdraw deposits simply because others are withdrawing theirs if consumers trust the insurance system.
  • Central banks act as a lender of last resort. To prevent a bank run, the Central Bank guarantees that it will make short-term, high-interest loans to banks, to ensure that, if they remain economically viable, they will always have enough liquidity to honour their deposits.
  • Reserve ratios and Tier 1 capital thresholds both limit the proportion of deposits which a bank can loan out.

Selected image

Vegetable and Fruit Market of Layyah at twilight.
Photo credit: Genghiskhanviet

A farmers' market (also farmers market) is a physical retail market featuring foods sold directly by farmers to consumers. Farmers' markets typically consist of booths, tables or stands, outdoors or indoors, where farmers sell fruits, vegetables, meats, and sometimes prepared foods and beverages. They are distinguished from public markets, which are generally housed in permanent structures, open year-round, and offer a variety of non-farmer/producer vendors, packaged foods and non-food products.

Selected economy

Financial buildings in the region of Luís Carlos Berrini Avenue
...Brazil has a moderate free market and export-oriented economy. Measured nominally, its Gross Domestic Product surpasses a trillion dollars, and measured by purchasing power parity, $1.8 trillion, making it the eighth largest economy in the world and the second largest in the Americas. Its nominal per capita GDP has surpassed $6,000 in 2007, due to the strong and continued appreciation of the real for the first time this decade. Its industrial sector accounts for three fifths of the South American economy's industrial production. The country's scientific and technological development is argued to be attractive to foreign direct investment, which has averaged US$20 billion per year the last years, compared to only US$2 billion/year last decade, thus showing a remarkable growth. The agricultural sector, locally called the agronegócio sector, has also been remarkably dynamic: for two decades this sector has kept Brazil amongst the most highly productive countries in areas related to the rural sector. The agricultural sector and the mining sector also supported trade surpluses which allowed for massive currency gains (rebound) and external debt paydown.

Brazil is a member of diverse economic organizations, such as Mercosur, SACN, G8+5, G-20 and the Cairns Group. Its trade partners number in the hundreds, with 74% of exports mostly of manufactured or semimanufactured goods. Brazil's main trade partners are: the EEC (26% of trade), the United States (24%), Mercosur and Latin America (21%) and Asia (12%). The owner of a sophisticated technological sector, Brazil develops projects that range from submarines to aircraft and is involved in space research: the country possesses a Launching Center for Light Vehicles and was the only country in the Southern Hemisphere to integrate the team responsible for the construction of the International Space Station (ISS). It is also a pioneer in many fields, including ethanol production. Brazil is also a pioneer in the fields of deep water oil research from where 73% of its reserves are extracted. According to government statistics, Brazil was the first capitalist country to bring together the ten largest car assembly companies inside its national territory.

Other selected economies... Read more...

Selected quote

"Corporate managers have directed a great deal of attention to defining their businesses as a crucial step in strategy formulation. Theodore Levitt, in his classic 1960 article in HBR, argued strongly for avoiding the myopia of narrow, product-oriented industry definition. Numerous other authorities have also stressed the need to look beyond product to function in defining a business, beyond national boundaries to potential international competition, and beyond the ranks of one’s competitors today to those that may become competitors tomorrow. As a result of these urgings, the proper definition of a company’s industry or industries has become an endlessly debated subject.

One motive behind this debate is the desire to exploit new markets. Another, perhaps more important motive is the fear of overlooking latent sources of competition that someday may threaten the industry. Many managers concentrate so singlemindedly on their direct antagonists in the fight for market share that they fail to realize that they are also competing with their customers and their suppliers for bargaining power. Meanwhile, they also neglect to keep a wary eye out for new entrants to the contest or fail to recognize the subtle threat of substitute products."

Michael Porter, How Competitive Forces Shape Strategy, 1979

Topics

Things you can do

Urgent and important articles are bold


Here are some tasks awaiting attention:

Related WikiProjects

Business news

Wikinews Economy and business portal Wikinews logo

On this day in Business history...

June 18:

Did you know

William McChesney Martin, Jr.
  • ...that, according to historical legend, Laissez-faire stems from a meeting in about 1681 between the powerful French finance minister Jean-Baptiste Colbert and a group of French businessmen led by a certain M. Le Gendre?
  • ...that Antoine Augustin Cournot derived the first formula for the rule of supply and demand as a function of price and in fact was the first to draw supply and demand curves on a graph in his Researches on the Mathematical Principles of the Theory of Wealth?
  • ...that the Toyota Production System (TPS) developed by Toyota, that comprises its management philosophy and practices, organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers?

Subcategories

Related portals


Wikimedia

The following Wikimedia Foundation sister projects provide more on this subject:

Wikibooks
Books

Commons
Media

Wikinews 
News

Wikiquote 
Quotations

Wikisource 
Texts

Wikiversity
Learning resources

Wiktionary 
Definitions

Wikidata 
Database

Wikipedia's Portals