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How Business Works

It is relatively easy to get on the road to employment. Especially if you get basic theoretical training. It is important for a novice entrepreneur to understand how the business works, how the processes are organized. It is equally important to understand the legal regulations for registration, recruitment and marketing.

Using this knowledge, you can already analyze niches and choose the most suitable one. Even if you already have an idea and you are ready to move on to drawing up a plan, you need to analyze it for competition, profitability, standards, availability of personnel in the market, assess the level of sales and future prospects.

Too hard? Only at the start. Today we have prepared for you a short educational program that will help you find your path in entrepreneurship. So, how does a business work and how to build your own business?

How business works book

With the right knowledge, business does not have to be difficult. Do you know the difference between profit margin, gross profit and net profit? What is cash flow or a limited company? How Business Works answers hundreds of questions and is an invaluable reference for anyone wanting to learn about business.This unique guide explains complex business concepts using simple, easy-to-understand language while defining hundreds of business terms such as stocks and shares, limited companies, partnerships and bond issues. Essential know-how is offered on everything from starting a small business to marketing your company and building your teams.No other business book explains the subject visually and in such a concise and immediate manner.

What is business?

Business is an independent entrepreneurial activity that has one key goal of earning income. All other points are rather side effects, both positive and negative. Each entrepreneur sets additional goals for himself.
Yes, these moments are rather intangible and the theory pays little attention to them. But they are important for processing your own idea, choosing a niche and working principles. Roughly speaking, you first need to decide what you expect from your business, in addition to profit, and only then decide on the idea.

You can choose a business model for yourself in the appropriate section of the site.
This is a huge mistake aspiring entrepreneurs make. They choose ideas that are profitable, competitive, but quickly lose the desire to do it. It also directly affects profits.

Errors in mastering theory

When people have a desire to create their own business, they light up with this idea and begin to absorb information. But the overwhelming majority goes completely in the wrong direction, trying to find knowledge.

They begin to read thousands of the same type of advice and articles, sign up for courses, subscribe to public pages on VKontakte, but they never get knowledge. All that they get is pseudo-motivation, cases taken from the head, a bunch of Englishisms and terms, but zero real ideas and instructions.

The trick is that you need to study material things, really useful disciplines.

All business processes that are used today can be divided into three basic categories. These are the main segments, each of which has its own description. Your contact with the world of entrepreneurship begins with them.

Trade activities, commerce

Roughly speaking, these are sales and resale. You don’t have to make a product here. The main thing is to realize it. American WallMart can be called giants of the industry, in Russia they are Magnit and Pyaterochka. This includes not only products, but also any other goods.

The principle of operation is simple: you purchase a batch from a supplier or manufacturer at a wholesale price. And then you sell it to a customer at retail. The difference between wholesale and retail prices is your profit.

The organizational structure depends on the size of the enterprise. A conventional grocery stall consists of three components: you are a businessman, a supplier, and a buyer. Hired salesman, employee, belongs to your side.

Services, maintenance

Here the product is not a material thing, an object. Rather, it is a certain help, solving a problem, and so on. The service sector is filled with more and more people who enter the market with a new offer and create new industries.


The area in which you are the manufacturer of the product. If the merchants are intermediaries, then you are the beginning of the chain. Manufacturing includes any tangible goods that can be traded.

This type of structure can either sell its products directly or work with intermediaries. Much depends on the scale of your production. For example, a confectionery corporation could sell candy itself by shipping it to stores. But it is easier for them to work with retailers, intermediaries from the world of trade, since it is cheaper, does not require constant analysis and maintenance of the entire delivery chain.

But on a small scale, they often sell products on their own. For example, bakeries in small towns. They do not have intermediaries, customers themselves come and buy products.

Sales and delivery

Sales is the sale of your product. Sales can be made to both the end customer and the reseller. Depending on the type of your case. For the amount of goods sold, you make a profit. If the cost of your product is zero, for example, you offer the services of a consultant, then all the income goes to you personally. After deducting taxes and maintaining the level of sales (marketing, some expenses, such as paying for an office or your own website).

Delivery is the purchase of raw materials for production, if you are a conventional plant. Or the purchase of a consignment of goods, if you are a merchant. The volume of purchases should be correctly selected in accordance with the volume of goods sold. Plus, you need to create a safety stock.