DEFINITION: An enterprise engaged in buying and selling with the aim of turning a profit. A business enterprise can provide products (whether real or virtual) or services. Some business enterprises constitute the point of origin for a product or service by respectively either building the product or making the service available in the first place. Other businesses act as intermediaries between such originating businesses and others, taking a cut from the transaction. Businesses may sell their products and services to other businesses (B2B, as in business to business) or end-point customers (B2C, as in business to customers).
In capitalist societies, entrepreneurs create businesses by risking capital (money and other resources) with the aim of recouping their investment and earning a profit. Entrepreneurs may put their own capital at risk or that of others or some combination of the two. When the capital of others is thus put at risk, it can be in the form of a loan from a lender (often a bank). If the business fails, the lender may be able to reclaim some portion of the amount loaned from remaining assets. Alternatively, capital put at risk can take the form of investment where the investor (sometimes called a venture capitalist) puts up capital for an ownership stake in the business. If the business fails, investors typically lose their entire investment.
Businesses can be organized in many ways. The functional structure of a business refers to the way its employees and their work environment is organized to provide the business’s products and/or services. The legal structure refers refers to the type of structure it is for legal and accounting purposes (e.g., sole proprietorship, partnership, or corporation).
SYNONYMS: enterprise, company, concern, establishment, firm, venture, trade, organization, pursuit, affair, interest, outfit.
ETYMOLOGY: The term business comes from the old English bisignes meaning anxiety, care, concern, or preoccupation. Likewise, the adjectival form bisig means anxious, careful, concerned, or preoccupied. From here the term came to mean being occupied and engaged, and therefore diligent and industrious, and hence “busy.” The opposite of business is therefore leisure or lack of employment. Business therefore came to denote a person’s occupation or work, what they do for a living. By the 18th century, business assumed its present meaning as a commercial enterprise.
It’s interesting that the term business originates from the idea of anxiety. To this day we speak of “business concerns,” and the word “concern” is a synonym for anxiety. Businesses require diligent care for their success and thus always seem to involve anxiety. Perhaps that’s why Aristotle counseled that a life of leisure is preferable to a life of business. Perhaps that’s also why Jesus spoke of rich people (presumably business persons) having a hard time getting into heaven, being tied too much to the concerns of this life.