16 Understand how businesses work

 

Most of us work in a business or business-like environment; even nonprofits and many government agencies have a predominantly business-like approach to the way they work. It therefore makes sense that you should understand the “rules of the game” for businesses in general. Doing so can help you contribute more effectively, and navigate your career journey more efficiently.

16.1 Businesses are people too

In most countries, businesses are, from a legal sense, considered entities in the same way that people are. Companies have individual rights and obligations, often pay taxes, can own and sell property, and so on. The Romans of the mid-500s (mid-500s A.D., that is) recognized a range of corporate entities; the word corporation itself comes from the Latin corpus, meaning a body, or more specifically in this case a body of people.

16.1.1 Businesses and their relationships

16.1.2 Customers and employees

16.1.3 One-sided relationships

16.1.4 Dealing with changes in the relationship

16.2 How businesses really make money

16.3 What does your business sell?

16.3.1 Example 1: Terri’s International Bulbs

16.3.2 Example 2: Martin’s Theme Parks

16.3.3 Example 3: Pat’s Fruity Clothing

16.3.4 Know the details of the business

16.4 Understanding risk and reward

16.5 Further reading

16.6 Action items