How business works

How business works


Every type of business has to choose an ownership structure. Although there are variations globally, most countries offer similar types of legal entities, from a single- person private enterprise to a massive organization trading on a stock exchange. There are three key considerations: how big the venture is expected to grow; the complexity of financial recording, management, and reporting that the proprietor is willing to take on; and the amount of liability the owner is willing to accept.

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352 pages, published in 2015

The term “business” refers to an organization or commercial enterprise engaged in producing and trading goods and services for money. We can trace the origins of business to the very foundations of human society. When Homo sapiens evolved, mankind left behind the nomadic hunter-gatherer lifestyle to become farmers. This allowed for specialization of work, where individuals would become skilled at specific tasks to serve a particular community need. Over time, this enabled more complex goods and services to be produced and traded, in order to provide for all members of society. Thus, human society has been engaging in “business” for thousands of years.

Today the world of business is inescapable—businesses are no longer just local providers of goods and services, but extend to vast corporate enterprises operating on a global scale. For governments to function and economies to flourish, a successful and thriving business sector is essential. Whether businesses are small or large, public or private, for-profit or nonprofit, they each play a key role in supporting the global economy, and together they form the backbone of the modern world. Business underpins every aspect of the world we live in today, and understanding how it works is the key to understanding society.

This book explains the complex world of business in a simple and graphic way. It examines every aspect of how a business works, including forming a company, raising capital, product development and marketing, management strategies, tracking revenue, financial reporting, and legal, social, and environmental responsibilities. Through visual explanations as well as real-life examples to make even the most complex concept immediately accessible, How Business Works offers a clear understanding of what business is all about and how business, in its many forms, shapes modern society.

Georgina Palffy