Beginner Business Guide

In economics, business is an organization that sells goods or services to consumers or other businesses, for a profit. Historically the business of the English word business, busy from the word which means "busy" in the context of individual, community, or society. In a sense, been busy doing the work activities and be profitable.

Making money in business sometimes seems impossible but you may think that there is a magic formula. Business isn't an exact science, its about being creative. Although business decisions are often backed by facts and figures a lot of the decisions are made on a hunch, a feeling that the person has about a situation.

At first this seems to be a strange way to make important business decisions, almost a risky strategy but successful people are successful for a reason. Their minds seem to automatically be able to spot a good deal and their hunches make them a lot of money.

On the surface most propositions seem like a good deal, the person seeking the finance has made it his business to get the money he needs. It's only when you scratch the surface and dig a little deeper that you begin to unearth what is going on.

When you are investing you are looking for a good return on your investment. You don't want to be shelling out money to fund somebody's dream, you want a good return on your investment. You need to assess the risk There will always be a certain amount of risk with any investment but you can do a few things to minimize the risk.

In order to assess the risks you need to get as much info as possible. You need information about the companies past performance. You need to know their profit and losses for the past three years. You need to know the companies staff turnover. You need to know everything about the directors; what type of person they are, do they have any other business interests, have they ever filed for bankruptcy. After all you are not just investing in bricks and mortar you are investing in the person who will be using your money, hopefully putting it to good use.

Its very difficult to put an exact formula into action when valuing a business. Most people think that a business can be assessed by using a multiple of the profits. To a certain extent it can be but there a number of other things that will affect the value. Your experience will play a large part in assessing the worth of a business.

Business is not exact science and sometimes you need to use your hunches to get a better deal