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How To Earn Profit In Business? < Business Articles By Mast Business Directory

Business is always considered an organization but it is not so. Business refers to the system to produce or distribute goods or services to the customer with the basic aim to earn profit. Indeed, a company does such activities even a shopkeeper does business. Therefore, if we talk about business, then we talk about the aim of business which is same for a company, firm, organization or an entrepreneur, which is to earn profit. Profit increases the money that a businessman has invested in the activity and it also increases the area of business. There is no single business institution which does not have the aim to earn the profit.

Profit

Profit is a unique term of business. After the expenditure on the activity of the business, the remaining amount is called the profit. In a more technical term, after the exclusion of the expenses of production or distribution from the business return, the rest of the income is profit. If a business firm does not have the aim to earn the profit, then it will be weakened by the passage of time and once it is dissolved, there will be no increase in the capital or the investment of the businessman. Likely, business needs some amount of money to make his status and widen the area. But on the other hand, if a businessman just thinks about profit, then he will not succeed because it will charge an extra amount from the customer and will exploit him. Profit is earned due to the remuneration of those people who are a part of that business entity. It is a wide disputed debate topic that whether to earn profit in the business is utmost or to think that what are the customer‘s rights, because these are the people who will buy the product and will enable the business to run.

If we talk about a business institute, we should be aware about the concept of customer desires. Certainly, it is the customer who will use and utilize the product and if they do not demand, then that product‘s company will suffer a great loss. If we examine a business environment, then we will see the initial effect of the customer to the business firm. With a slight dejection of the product by the customer, the company can face a big loss. They are in fact the customer, not the businessman or the worker, which enable the business to run.

There are many factors which regret the aim of earning profit at wide range because it has many adverse effects on the society and the economy. A businessman seeks to earn more and more profit that will make them richer and those people who buy that product will suffer a decline in the financial status. That results to a practical distribution of the society in two groups, one is the rich and other is the poor. It will disturb the whole economy.

Corporate Social Responsibility

To stop such cases, a well-known aspect of the business comes at the view that is corporate social responsibility. Corporate social responsibility is much known for the welfare activities but that they do not make the whole sense. Corporate social responsibility is referred to that activity in which the corporation, company or an entrepreneur, tend to make itself much valuable for the society. Social responsibilities are measured by degrees which include many features. It initially tends to make the company more strong on the economic bases. If the company is earning much profit, then it should reimburse the employees more because it is due to their hard work that the company is earning so much profit. In the second degree, it tends to make the company have a legal and an ethical value in the society. It is also known as the social degree in which makes it clear that a company should have a legal existence and pay taxes. Taxes will make the government strong which will provide social ease. Along with that, the company should also be ethical and should provide a very apparent image to the outer world about the society and should provide its all account summaries to the people. The last part is the social responsiveness degree that tends the company to make a major problem of the society to erase. It has a broad and a wide range.

Social responsibility make the profit of the company less, therefore the company gives an additional cost of this expenditure on the product. It is just like that the society is paying for itself. Indeed, it is not ethical but a proportion of the amount is paid by the company and it is even more advantageous for the company because it can advertise its social aspects to the people for a better image and goodwill.

Profitable Business Institutes

If we take about a business institution we think of three firms

1. Entrepreneur
2. Partnership
3. Corporation

The most easily defined type is the entrepreneur, in which the investor in a single body who handles the business. The other is partnership, in which the number of investors is more than that in the entrepreneur. They together handle the business and make the decisions. The third and the last type is the corporation or a company.

Profit in a company

Company is a great amount of recourses and a whole board of professional to make the decisions. It has numerous amounts of investors and a very sound financial status. These types of businesses are much more profitable than the others because it has a good risk management feature. All the decisions are handled by the experts of the field with a strong knowledge and they have a huge capital. They give out shares in the market, which are bought by the customer also called shareholder, and thus they earn a periodical profit on the investments. They don’t need to make any business decision. A person can earn more profit in this kind of business, therefore they are widely known. Unlike the other two types, entrepreneur and partnership, a company has limited liabilities. In other words, a company cannot take more liability than its resources. In the entrepreneur and partnership business, the businessman tends to take more and more liabilities of debts over himself than the resources. At a certain limit of the debt, he becomes unable to pay them back and therefore becomes bankrupt. But in the company business, by the continuous addition of shareholders, they never get bankrupted. If they are under a major loss, then they have a very sound risk management system. They get themselves insured and tend to be more conscious over any deal.

The shareholders enjoy a very good and a beneficial business with a regular profit, considering in the mind that they have invested their money in a very profitable company. Choosing a company to invest is not a hard job. Find a reliable stock broker with a great knowledge and experience about the market and the values of the company.

Profit measures in the other businesses

Talking about the entrepreneur and the partnership, they are also profitable but in the sense, if they are adequate to manage the organization. An entrepreneur can have much more profit than the company’s investment money. An entrepreneur uses his managing qualities and the knowledge about the product and market to boost up the profit. Indeed, he needs to have a large amount of experience and expertise about the variation of the market. Like, a merchant or a trader uses his investment and skills to sell the product, whether self-made or a third party product and earns the profit.

Partnership is not much different from entrepreneur. It has the merged qualities of many entrepreneurs. If likely an entrepreneur has great knowledge about the market and the sales aspects, then they can merge themselves to earn a greater amount of profit. Many times, with the unavailability of the recourses, these entrepreneurs merge themselves to have an adequate profit. Resources include everything like money, labor, or time etc. They try to run their business in a good and a fine condition. Some people think that by merging of the company, the profit in not much the same. It is not true, mostly it is analyzed that the profit is doubled and the profit proportion to each partner rises.

Concluding that if someone has the knowledge about the market and is more intellectual, then he must go for the business like the entrepreneur or partnership. If he is in a job then he must have money to invest. At a very strong height of experience, he can leave the job and can start his own business. He can also be a hidden partner in any other firm to gain profit. Alternatively, if somebody doesn’t have the knowledge about any product or market, then he can go to invest his money in any of the profitable and creditable company by buying shares. He just needs to examine the yearly dividend and the yearly premium, which he has paid.

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