Business and Investment

     Business is an activity that uses a certain capital for gainsome advantage, also known as an enterprise or a firm, is an organization involved in the trade of goods, services, or both to consumers. Businesses are prevalent in capitalist economies, where most of them are privately owned and provide goods and services to customers in exchange for other goods, services, or money. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company.

      The etymology of “business” stems from the idea of being busy, and implies socially valuable and rewarding work. Business can refer to a particular organization or, more generally, to an entire market sector, e.g. “the music business”. Compound forms such as agribusiness represent subsets of the word’s broader meaning, which encompasses all activity by suppliers of goods and services

       Business is part of an investment activity as it relates to capital investment.Investment is time, energy, or matter spent in the hope of future benefits actualized within a specified date or time frame. Investment has different meanings in economics and finance.

      In economics, investment is the accumulation of newly produced physical entities, such as factories, machinery, houses, and goods inventories.

     In finance, investment is putting money into an asset with the expectation of capital appreciation, dividends, and/or interest earnings. This may or may not be backed by research and analysis. Most or all forms of investment involve some form of risk, such as investment in equities, property, and even fixed interest securities which are subject, among other things, to inflation risk. It is indispensable for project investors to identify and manage the risks related to the investment.

John Keynes refers investment as real investment and financial investment.Real investment is money that is invested in tangible and productive assets such as machinery, technology, business services, property and plant, as opposed to investment in securities or other financial instruments. A financial investment is an asset that you put money into with the hope that it will grow or appreciate into a larger sum of money

    Financial investment is divided into two kinds, namely direct and indirect. Direct investment means the investor can directly conduct such transactions with the broker / broker without going through a particular intermediary. Indirect financial Investment means to go through an agency or specific institution such as mutual fund investment. Investment could indirectly be divided into two kinds of investments that can be traded and investments that cannot be traded. Investments that are not traded is the simplest form such as savings and giro, while the tradable investment consisting of capital market, money market and futures commodity markets. Examples of capital markets are in the form of stock andobligation such as bonds. Examples of forward foreign exchange market are the money, insurance and certain currencies. While examples of commodity futures markets such as commodity futures is commodity of cloves, cocoa, and forex trading etc.

    Real sector investments generally require substantial capital and a relatively long time to evolve compared to the financial sector investments. The surplus is to have a smaller risk when compared with the financial sector investments, except when compared with the financial investment in the form of savings or checking account is low risk but also low gain.

   Choosing an investment or a business what would you like according to your own. Which do you think is more suitable with your expertise, capital, and the interest you have. If you choose a high-potential investment in a gain of course you also you should understand that the investments have a high risk as well, as in forex trading. Forex is a global decentralized market for the trading of currencies. The foreign exchange market is the most liquid financial market in the world. Traders include large banks, central banks, institutional investors, currency speculators, corporations, governments, other financial institutions, and retail investors. The average daily turnover in the global foreign exchange and related markets is continuously growing. According to the 2010 Triennial Central Bank Survey, coordinated by the Bank for International Settlements, average daily turnover was US$3.98 trillion in April 2010 (vs $1.7 trillion in 1998). Of this $3.98 trillion, $1.5 trillion was spot transactions and $2.5 trillion was traded in outright forwards, swaps and other derivatives. Forex trading has a huge risk but also have a very large gain.

Classifications of Business

  • Agriculture and mining businesses produce raw material, such as plants or minerals.
  • Financial businesses include banks and other companies that generate profits through investment and management of the capital.
  • Information businesses generate profits primarily from the sale of intellectual property and include movie studios, publishers and internet and software companies.
  • Manufacturers produce products, from raw materials or from component parts, then sell their products at a profit. Companies that make tangible goods such as cars, clothing or pipes are considered manufacturers.
  • Real estate businesses sell, rent, and develop properties including land, residential homes, and other buildings.
  • Retailers and distributors act as middlemen and get goods produced by manufacturers to the intended consumers, and make their profits by marking up their price. Most stores and catalog companies are distributors or retailers.
  • Service businesses offer intangible goods or services and typically charge for labor or other services provided to government, consumers, or other businesses. Interior decorators, consulting firms and even entertainers are service businesses.
  • Transportation businesses deliver goods and individuals to their destinations for a fee.
  • Utilities produce public services such as electricity or sewage treatment, usually under a government charter.

(Source : wikipedia.org, education-portal.com, etc)

sameyadi

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