What exactly does the word “business” mean? A business is generally defined as any organization or business that engages in commercial, industrial, or service activities. Companies may be profit-making enterprises or non-profitable ones that carry out social welfare-based activities or some other noble cause. In business-speak, the term “enterprise” is used to describe the entire business structure as well as its operations. An enterprise, which carries out a commercial activity, may be one individual or a corporation, and may have either permanent employees who are hired on contract.
All businesses must develop a business strategy in order to effectively compete with other organizations in the marketplace. A business strategy is designed to ensure that the goals and objectives of the business are achieved through a systematic approach that takes into account the total number of individuals working within the enterprise, the characteristics of the enterprise, the relative weights of the various factors that are involved in the process of business operation, and the environment in which the businesses operate. All these aspects must be taken into consideration in order for a business to develop a sound business strategy that will guide it in reaching its goals and objectives.
Aside from developing a business strategy, businesses also need to determine their exit strategy. An exit strategy is a plan for how a business owner would go about liquidating his shares of ownership in order to minimize his risk in receiving payments if the business encountered a decline in its market share prices. Some companies allow their stockholders to sell their stocks during a specified period of time after which they can buy back the stocks at a predetermined price. Others allow their stockholders to sell their stocks at any point up to the date when the company ceases trading operations. A business that intends to sell its shares will generally have to submit audited financial statements and other information to the Securities and Exchange Commission in order to receive approval for its planned sale of shares.