Business Sales
Business
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v • d • e
A business (also called a firm or an enterprise) is a legally recognized organization designed to provide goods and/or services to consumers.[1] Businesses are predominant in capitalist economies, most being privately owned and formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Notable exceptions include cooperative businesses and state-owned enterprises. Socialist systems involve either government agencies, public, or worker ownership of most sizable businesses.
The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate.
Business Studies, the study of the management of individuals to maintain collective productivity in order to accomplish particular creative and productive goals (usually to generate profit), is taught as an academic subject in many schools.
Contents [hide]
1 Basic forms of ownership
2 Classifications
3 Management
4 Government regulation
4.1 Organizing
4.2 Commercial law
4.3 Capital
4.4 Intellectual property
4.5 Exit plans
5 See also
6 External links
7 Notes and references
Basic forms of ownership
Although forms of business ownership vary by jurisdiction, there are several common forms:
Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has total and unlimited personal liability of the debts incurred by the business.
Partnership: A partnership is a form of business in which two or more people operate for the common goal of making profit. Each partner has total and unlimited personal liability of the debts incurred by the partnership. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
Corporation: A business corporation is a for-profit, limited liability entity that has a separate legal personality from its members. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff.
Cooperative: Often referred to as a "co-op business" or "co-op", a cooperative is a for-profit, limited liability entity that differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.
For a country-by-country listing of legally recognized business forms, see Types of business entity.
Classifications
Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business.[citation needed]There are many types of businesses, and, as a result, businesses are classified in many ways. One of the most common focuses on the primary profit-generating activities of a business:
Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals.
Financial businesses include banks and other companies that generate profit through investment and management of capital.
Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies.
Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers.
Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.
Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalogue companies are distributors or retailers. See also: Franchising
Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses or consumers. Organizations ranging from house decorators to consulting firms to restaurants and even to entertainers are types of service businesses.
Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs
Utilities produce public services, such as heat, electricity, or sewage treatment, and are usually government chartered.
There are many other divisions and subdivisions of businesses. The authoritative list of business types for North America is generally considered to be the North American Industry Classification System, or NAICS. The equivalent European Union list is the NACE.
Management
The study of the efficient and effective operation of a business is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, service management, information technology management, and business intelligence.
See also:
Management
Business Operations
Government regulation
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The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article or discuss the issue on the talk page.
The Bank of England in Threadneedle Street, London, England.Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.
Organizing
The major factors affecting how a business is organized are usually:
The size and scope of the business, and its anticipated management and ownership. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as partnerships or (more commonly) corporations. In addition a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
The sector and country. Private profit making businesses are different from government owned bodies. In some countries, certain businesses are legally obliged to be organized certain ways.
Limited liability. Corporations, limited liability partnerships, and other specific types of business organizations protect their owners from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
Disclosure and compliance requirements. Different business structures may be required to make more or less information public (or reported to relevant authorities), and may be bound to comply with different rules and regulations.
Many businesses are operated through a separate entity such as a corporation, limited partnership or limited liability company. Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person." This means that unless there is misconduct, the owner's own possessions are strongly protected in law, if the business does not succeed.
Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.
A single person who owns and runs a business is commonly known as a sole proprietor, whether he or she owns it directly or through a formally organized entity.
A few relevant factors to consider in deciding how to operate a business include:
General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
In most countries, there are laws which treat small corporations differently than large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
In order to "go public" (sometimes called IPO) -- which basically means to allow a part of the business to be owned by a wider range of investors or the public in general -- you must organize a separate entity, which is usually required to comply with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLCs that sell units (sometimes also called shares), and other more exotic entities as well (for example, REITs in the USA, Unit Trusts in the UK). However, you cannot take a general partnership "public."
Commercial law
Most commercial transactions are governed by a very detailed and well-established body of rules that have evolved over a very long period of time, it being the case that governing trade and commerce was a strong driving force in the creation of law and courts in Western civilization.
As for other laws that regulate or impact businesses, in many countries it is all but impossible to chronicle them all in a single reference source. There are laws governing treatment of labor and generally relations with employees, safety and protection issues (OSHA or Health and Safety), anti-discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation), minimum wage laws, union laws, workers compensation laws, and annual vacation or working hours time.
In some specialized businesses, there may also be licenses required, either due to special laws that govern entry into certain trades, occupations or professions, which may require special education, or by local governments. Professions that require special licenses range from law and medicine to flying airplanes to selling liquor to radio broadcasting to selling investment securities to selling used cars to roofing. Local jurisdictions may also require special licenses and taxes just to operate a business without regard to the type of business involved.
Some businesses are subject to ongoing special regulation. These industries include, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can impact many kinds of businesses in unexpected ways.
Capital
When businesses need to raise money (called 'capital'), more laws come into play. A highly complex set of laws and regulations govern the offer and sale of investment securities (the means of raising money) in most Western countries. These regulations can require disclosure of a lot of specific financial and other information about the business and give buyers certain remedies. Because "securities" is a very broad term, most investment transactions will be potentially subject to these laws, unless a special exemption is available.
Capital may be raised through private means, by public offer (IPO) on a stock exchange, or in many other ways. Major stock exchanges include the New York Stock Exchange and Nasdaq (USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and so on. Most countries with capital markets have at least one.
Business that have gone "public" are subject to extremely detailed and complicated regulation about their internal governance (such as how executive officers' compensation is determined) and when and how information is disclosed to the public and their shareholders. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other Western nations have comparable regulatory bodies.
As noted at the beginning, it is impossible to enumerate all of the types of laws and regulations that impact on business today. In fact, these laws have become so numerous and complex, that no business lawyer can learn them all, forcing increasing specialization among corporate attorneys. It is not unheard of for teams of 5 to 10 attorneys to be required to handle certain kinds of corporate transactions, due to the sprawling nature of modern regulation. Commercial law spans general corporate law, employment and labor law, healthcare law, securities law, M&A law (who specialize in acquisitions), tax law, ERISA law (ERISA in the United States governs employee benefit plans), food and drug regulatory law, intellectual property law (specializing in copyrights, patents, trademarks and such), telecommunications law, and more.
In Thailand, for example, it is necessary to register a particular amount of capital for each employee, and pay a fee to the government for the amount of capital registered. There is no legal requirement to prove that this capital actually exists, the only requirement is to pay the fee. Overall, processes like this are detrimental to the development and GDP of a country, but often exist in "feudal" developing countries.
Intellectual property
Businesses often have important "intellectual property" that needs protection from competitors in order for the company to stay profitable. This could require patents or copyrights or preservation of trade secrets. Most businesses have names, logos and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law. Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors. Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties.
Exit plans
Businesses can be bought and sold. Business owners often refer to their plan of disposing of the business as an "exit plan." Common exit plans include IPOs, MBOs and mergers with other businesses.
Sales
From Wikipedia, the free encyclopedia
Jump to: navigation, search
The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article or discuss the issue on the talk page.
This article needs additional citations for verification. Please help improve this article by adding reliable references (ideally, using inline citations). Unsourced material may be challenged and removed. (April 2008)
"Salesman" redirects here. For the 1969 American documentary film, see Salesman (film).
A sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity.[1]
A sale is completed by the seller, the owner of the goods. It starts with consent (or agreement) to an acquisition or appropriation or request followed by the passing of title (property or ownership) in the item and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership, being a price the seller is happy to part with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price the sale is still valid and gives rise to an obligation to pay.
Contents [hide]
1 Sales techniques
2 Sales agents
3 The sales and marketing relationship
3.1 Marketing potentially negates need for sales
3.2 Industrial marketing
4 Sales and marketing alignment and integration
5 Scoring Sales
6 See also
7 Notes and references
8 External links
Sales techniques
A beach salesman selling necklacesThe sale can be made through:[2]
Direct sales, involving person to person contact
Buying Facilitation Method
Pro forma sales
Agency-based
Sales agents (real estate, manufacturing)
Sales outsourcing through direct branded representation
Transaction sales
Consultative sales
Complex sales
Consignment
Telemarketing or telesales
Retail or consumer
Traveling salesman
Door-to-door
To tourists on crowded beach
Request for proposal – An invitation for suppliers, through a bidding process, to submit a proposal on a specific product or service. An RFP is usually part of a complex sales process, also known as enterprise sales.
Business-to-business – Business-to-business sales are much more relationship based owing to the lack of emotional attachment to the products in question. Industrial/Professional Sales is selling from one business to another
Electronic
Web – Business-to-business and business-to-consumer
Electronic Data Interchange (EDI) – A set of standard for structuring information to be electronically exchanged between and within businesses
Indirect, human-mediated but with indirect contact
Mail-order
Sales Methods:
Selling technique
SPIN Selling
Consultative selling
Sales enablement
Solution selling
Conceptual Selling
Strategic Selling
Sales Negotiation
Reverse Selling
Paint-the-Picture
Large Account Management Process
Sales agents
Agents in the sales process can be defined as representing either side of the sales process for example:
Sales broker or Seller agency or seller agent
This is a traditional role where the salesman represents a person or company on the selling end of the deal.[3]
Buyers broker or Buyer brokerage
This is where the salesman represents the consumer making the purchase. This is most often applied in large transactions.
Disclosed dual agent
This is where the salesman represents both parties in the sale and acts as a mediator for the transaction. The role of the salesman here is to over see that both parties receive an honest and fair deal, and is responsible to both.
Transaction broker
This is where the salesperson doesn't represent either party, but handles the transaction only. This is where the seller owes no responsibility to either party getting a fair or honest deal, just that all of the papers are handled properly.
Sales Outsourcing
This is direct branded representation where the sales reps are recruited, hired, and managed by an external entity but hold quotas, represent themselves as the brand of the client, and report all activities (through their own sales management channels) back to the client. It is akin to a virtual extension of a sales force. (see Sales Outsourcing entry)
Sales Managers
It is the goal of a qualified and talented sales manager to implement various sales strategies and management techniques in order to facilitate improved profits and increased sales volume. They are also responsible for coordinating the sales and marketing department as well as oversight concerning the fair and honest execution of the sales process by his agents.[4]
Salesmen
The primary function of professional sales is to generate and close leads, educate prospects, fill needs and satisfy wants of consumers appropriately, and therefore turn prospective customers into actual ones. The successful questioning to understand a customer's goal and requirements relevant to the product, the further creation of a valuable solution by communicating the necessary information that encourages a buyer to achieve their goal at an economic cost is the responsibility of the salesperson or the sales engine (e.g. internet, vending machine etc). A good salesman should never miss sell or over evaluate the customers requirements. A great salesman will never UNDER evaluate or under sell his
customer, he allow the customer to make the decision he never pre-qualify a sales lead.
The sales and marketing relationship
Marketing and sales are very different, but have the same goal. Marketing improves the selling environment and plays a very important role in sales. If the marketing department generates a potential customers list, it can be beneficial for sales. The marketing department's goal is to increase the number of interactions between potential customers and the sales team using promotional techniques such as advertising, sales promotion, publicity, and public relations, creating new sales channels, or creating new products (new product development), among other things.
The relatively new field of Sales process engineering views "sales" as the output of a larger system, not just that of one department. The larger system includes many functional areas within an organization. From this perspective, sales and marketing (among others, such as customer service) are labels for a number of processes whose inputs and outputs supply one another to varying degrees. Considered in this way, to improve the "output" (namely, sales) the broader sales process needs to be studied and improved as would any system, since the component functional areas interact and are interdependent[5].
In most large corporations, the marketing department is structured in a similar fashion to the sales department[citation needed] and the managers of these teams must coordinate efforts in order to drive profits and business success. For example, an "inbound" focused campaign seeks to drive more customers "through the door" giving the sales department a better chance of selling their product to the consumer. A good marketing program would address any potential downsides as well.
The Sales department's goal would be to improve the interaction between the customer and the sales facility or mechanism (example, web site) and/or salesperson. Sales management would break down the selling process and then increase the effectiveness of the discreet processes as well as the interaction between processes. For example, in many out-bound sales environments, the typical process is out bound calling, the sales pitch, handling objections, opportunity identification, and the close. Each step of the process has sales-related issues, skills, and training needs as well as marketing solutions to improve each discrete step, as well as the whole process.
One further common complication of marketing involves the inability to measure results for a great deal of marketing initiatives. In essence, many marketing and advertising executives often lose sight of the objective of sales/revenue/profit, as they focus on establishing a creative/innovative program, without concern for the top or bottom lines. Such is a fundamental pitfall of marketing for marketing's sake.
Many companies find it challenging to get marketing and sales on the same page. Both departments are different in nature, but handle very similar concepts and have to work together for sales to be successful. Building a good relationship between the two that encourages communication can be the key to success even in a down economy.[6]
Marketing potentially negates need for sales
Some sales authors and consultants contend that an expertly planned and executed marketing strategy may negate the need for outside sales entirely. They suggest that by effectively bringing more customers "through the door" and enticing them to contact you, sales organizations can dramatically improve their results, efficiency, profitability, and allow salespeople to provide a drastically higher level of customer service and satisfaction, instead of spending the majority of their working hours searching for someone to sell to. [7]
While this theory is present in a few marketing consulting companies the practical and realistic application of this principle has not been widely proven in the market and sales forces worldwide continue to be responsible for developing business as well as closing it.
Some marketing consulting firms postulate that each selling opportunity at each enterprise lies on a continuum of numbers of people involved, necessary degree of face-to-face interaction, overhead, and through-put time, to name a few dimensions. The number of people involved in actual face-to-face selling at, say, a clothing store is probably vastly different than at an on-line book-seller.
Industrial marketing
The idea that marketing can potentially eliminate the need for sales people is entirely dependent on context. For example, this may be possible in some B2C situations however, for many B2B organisations (for example industrial organisations) this is mostly impossible. Another dimension is the value of the goods being sold. Fast Moving Consumer Goods (FMCG) require no sales people at the point of sale to get them to jump off the supermarket shelf and into the customer's trolley. However, the purchase of large mining equipment worth millions of dollars will require a sales person to manage the sales process. Particularly in the face of competitors. Organisations that rely on business to "walk in the door" often are left floundering during economic downturns as illustrated in this article "Turning inside cats into outside cats, or how to get the sales force out selling"[3]
Sales and marketing alignment and integration
Another key area of conversation that has arisen is the need for alignment and integration between corporate sales and marketing functions. According to a report from the Chief Marketing Officer (CMO) Council, only 40 percent of companies have formal programs, systems or processes in place to align and integration between the two critical functions. Traditionally, these two functions, as referenced above, has been largely segmented and left in siloed areas of tactical responsibility. In Glen Petersen’s book, “The Profit Maximization Paradox,” the changes in the competitive landscape between the 1950s and today are so dramatic that the complexity of choice, price and opportunities for the customer forced this seemingly simple and integrated relationship between sales and marketing to change forever. Petersen goes on to highlight that salespeople are spending approximately 40 percent of their time preparing customer-facing deliverables while leveraging less than 50 percent of the materials created by marketing, adding to the perception that marketing is out of touch with the customer, and sales is resistant to messaging and strategy. Organizations like The Coalition to Leverage and Optimize Sales Effectiveness (CLOSE) "CLOSE". http://www.closebiz.org. have emerged as a facilitator to mend the relationship between sales and marketing. Internet applications, commonly referred to as Sales 2.0 tools, have also increasingly been created to help align the goals and responsibilities of marketing and sales departments.[8]
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