Creating a Balanced Business Model

A business is a group of people working towards a common purpose. Businesses can be run by an individual or by a company. Most businesses are run by a corporation, which is an association of stockholders. Other individuals may also purchase the goods and services being supplied by the business. The business owner is usually the individual who hires workers for specific work. A business can make a profit from the services and goods it provides.

The term corporation comes from the word corporation, which is an institution or body of people acting collectively for a common purpose. In order to become a corporation, there must be registered capital. Businesses can incorporate either by a sole proprietorship or by a partnership. Each has its own advantages and disadvantages. For the purpose of profit maximization, a business should seek both types of structure.

A sole proprietor, have ownership and responsibility for the business environment. They generally own the building, machinery, and inventory that is required to run their business. They make money off of the consumer demands made by their customers. The profit is then divided among the owners according to the productivity of their sales. For businesses that do not have much of a structure, they seek to maximize their profit through the use of advertising and prescription-filled drugs.

For businesses that do have a corporate social responsibility and vision, they help consumers in their economic value-added activities. Some key takeaways from this include providing goods and services that will enhance the economic well-being of their communities. They also provide job opportunities to citizens and help them solve problems.

For a corporation to meet its profit goal, it must be able to get more than one stakeholders’ consent before making any major changes to its business models. Approval by at least two stakeholders is necessary for most major decisions. When a major change is implemented, stakeholders must be consulted to understand the impact that the change will have on their lives. Usually, the impact will be documented and analyzed in detail at the earliest opportunity after the change has been implemented.

A firm may use many different ways to increase its revenues without increasing its costs. Changes in revenue can come in many different forms. Other key takeaways from this chapter include: a firm may increase revenue by changing its marketing mix by focusing on one or two key sectors; a firm may focus on increasing the efficiency of delivery by reducing waste and improving service, and a firm may improve its profitability by improving the efficiency of the distribution system. As you examine different business models, these key takeaways are essential for you to develop a balanced revenue model that increases profits while reducing costs and reducing waste.