Communities began to form when residents started specializing in trading and selling goods and services. Certain individuals began to capitalize on their skills by offering said skills in exchange for produce or livestock, which was the currency back then. A few hundred years later, industrialists began profiting from the same idea by operating using the same means; except now we call them business owners. Many writers and scholars have attempted to find a true business definition. However, the exact business meaning remains ambiguous and changes from era to era. Before industrialization business was simply the small exchange of goods and services for one another. Nowadays, we have finances, labour costs, corporations, enterprises, LLCs and other equivocal terms that require online research to understand. The only way to truly define business is by segmenting the meaning or introduce different business definitions for different time periods.
Simple Business Meaning
The old business definition of “trading goods and services for another” was not wrong during simpler times. Average Joe opening up a small grocery store was a business. offering goods from a farm you own was considered business. Opening a kiosk to act as valet service in a busy area is a business. These types of small businesses fit the old definition that we have relied on for years. Your produce/manufacture goods and you sell them for whatever currency that works during that time. However, does this simple method used to define business fit huge conglomerates, massive corporations and enormous enterprises? Do the aforementioned fit the business definition of trading goods and services for another service/other goods?
Below are two images that are both classified as a business. whether one business definition can fit the same buildings in the picture is highly doubtful.
Attempting to Define Business in the 21st Century
At the heart of almost every business lies the same concept: trade goods and services for money. What has changed in the last 100 years? At its core, the business definition has remained the same. The real change is within the peripherals. Owning a business no longer is about trading goods, but rather encompasses production, manufacturing, advertising and promoting for said goods. Nature remains the same but, with the emergence of so many different types of businesses, it is difficult to come up with one simple statement that reflects the exact business definition. A more literary business definition according to business scholars is “the organized effort of individuals to produce and sell for a profit.” Through this definition, we can sum up that true business meaning is the collaborative effort to make a profit.
Today’s Business World
Can the evolving and ever-changing nature of the community change a definition set forth tens of years ago? A couple of hundred years ago business was about finding out what society or the community needs, manufacturing and selling it. Today there is much more to it than that; business now entails not only manufacturing and selling, but also advertising for the product and convincing the consumer to opt for your products and services rather than the competition. The business definition that was set forth years ago may have indeed changed by today’s fierce and competitive market. Running a business now is much more different than it was.
New and emerging concepts are just now being studied (i.e., the concept of employee satisfaction and its impact on business success has led to the emergence of the human resources department in any company). These new concepts have changed the essence of a business and made it essential to have a new business meaning. It is no longer about trading goods and services, the simple business definition has indeed changed.
Business Definition Evolution through the Years
There is a reason why giving a true business meaning is not a simple task. In order to give a straightforward business definition, we must consider that every decade business owners focused on what seemed important for them at the time. Looking into a brief history of business definitions, we find that with every decade the way owners chose to define business was different.
In the 60’s it was all about quantity: how to industrialize and create as many products as possible in order to sell. The concept then was: the more you produce, the more you sell. Later in the ’70s entrepreneurs became more concerned with cutting costs (i.e, how to sell the same goods at the same price while decreasing costs to increase profit).
With the eruption of free markets everywhere and the appearance of numerous competition, owners began focusing on quality and how to make their products better than the competitor. Coming over to the 90’s the concept of lead time was of great importance (i.e, how to get the product in the hands of the consumer as fast as possible).
Today in the 21st century all the hub-bub is about offering more services to existing customers. By that time the prevalent and simple business definition was no longer trading goods and service for other goods and services.
This definition has become obsolete and no longer gives the true business meaning.
The Business Definition in One Word
If we were to use one word to define a business, this word would be “Profit.”Why do corporations rise and fall? What basis are companies built on? Why put forth the effort of setting up your own business? The answer to all these questions remains the same. In any business, remove all the layers of promotion, advertising, corporate social responsibility, and marketing; you will find the core of any business, the reason it operates the way it does: profit.
The Quest for an Accurate Business Definition
To sum up, this article attempted to define business over the ages. There are many business definitions and the way they are different depends on which time slot you are looking at. The simple business meaning of trade, buy and sell fits a time before the industrialization period. In spite of that, the same old and obsolete business definition is still being used today. The true way to define business nowadays should not only entail the process of buying and selling for profit. There is an added value concept to consider. Also, the support staff concept which can greatly contribute to a firm’s success without direct interference with the trading process.
A crucial matter to consider adding to the way we define business is the marketing concept. Producing and manufacturing are easy. The obstacle nowadays is delivering your product to the consumer and having the consumer choose you over others. Unless there is a business definition to encompass all these aspects, there will never be one precise, accurate and sufficient method to define a business.