By George N. Root III Updated March 09, 2019
The day of a business owner consists of decisions that impact daily productivity and company growth. To help run the company more efficiently, the company owner puts together policies and programs that address basic business activities. These comprehensive guidelines make it possible for all employees to understand how to carry out basic business tasks and allow the company to operate more efficiently. Identifying basic business activities makes business planning easier.
Crafting a Budget
Every company creates a budget that dictates how revenue is utilized in daily operations and in the pursuit of future growth. Each department manager gives input on the costs of ongoing operations, and then a budget is created that allows the company to track all spending and revenue. The budget from the previous year is compared to that year's actual results to create a guideline for creating the next year's spending plan.
Accounting Operations and Management
Accounting is the process of managing the flow of money in and out of the company. Areas that come under the accounting group are accounts payable, accounts receivable, payroll, customer credit accounts, collections and tax accounting. Accounting reporting is responsible for annual tax filings, monitoring company costs and maintaining financial relationships with vendors and customers.
Marketing Plans and Brand Recognition
Marketing helps to develop company and brand recognition in the marketplace as well as develop advertising pieces that the buying public would see. The marketing group develops comprehensive marketing plans that use sales projections to help determine the best way to use company resources to gain more exposure for the organization and its products.
Growing Sales and Building Relationships
Sales is the group that maintains direct contact with the customer base. The sales group reaches out to prospects to help expand the customer base while also maintaining relationships with existing clients to secure repeat sales. The sales force is skilled at matching up company solutions with customer needs to create product demand.
Hiring Qualified Employees
The human resources aspect of an organization is important to maintaining current operations as well as planning for future expansion. A company needs to actively search out qualified candidates whose qualifications match current available positions, or who can be kept available should a personnel need arise.
Customer Service and Preserving Relationships
Customer service maintains corporate revenue by resolving customer issues and preserving the buying relationship. The customer service group does not proactively seek to expand the company's revenue base by providing solutions to customers. Proactive customer interaction is reserved for the sales group. The customer service department is who the customer calls when they have a shipping, product or billing issue.
FAQs
There are three main types of business activities: operating, investing, and financing. The cash flows used and created by each of these activities are listed in the cash flow statement.
What activities are part of the six business functions? ›
Generally, the six functional areas of business management involve strategy, marketing, finance, human resources, technology and equipment, and operations.
What are the six basic activities completed by all businesses on Quizlet? ›
- Generating Ideas.
- Raising Capital.
- Employing and training personnel.
- buying goods and services.
- marketing goods and services.
- maintain business records.
Key operating activities for a company include manufacturing, sales, advertising and marketing activities. The operating income shown on a company's financial statements is the operating profit remaining after deducting operating expenses from operating revenues.
What is a main business activity? ›
Business activities are the actions companies take to earn profits through sales, investments, manufacturing and distribution. There are three main business activities: operating, investing and financing. Companies record business activities on their cash flow statements.
What is primary business activity? ›
Primary company activities refer to activities that generate more than half of the company's revenue. When a company has more than one business activity, the primary activity refers to the one with the largest gross receipts.
What are the six 6 key functions of business operation? ›
However, here are six key functions in business operations:
- Accounting.
- Finance.
- Production.
- Marketing.
- Sales.
- Management.
The seven functions of marketing are marketing information management, financing, product and service management, pricing, promotion, selling, and distribution. To help your business grow, you need each area to come together and build a productive marketing approach.
What are the basic functions of a business organization? ›
The core business functions include marketing, operations, sales, and customer service. In addition to the core functions, there are support functions such as human resources (HR), finance, and information technology (IT) that help the core functions meet the strategic goals of the business.
What are the first of six major steps in the process organizations go through in setting prices? ›
How to price a product? Here are the steps!
- Step 1: Selecting the pricing objective. ...
- Step 2: Determining demand. ...
- Step 3: Estimating costs – ensuring profits. ...
- Step 4: Analysing Competitors' Costs, Prices, and Offers. ...
- Step 5: Choosing your pricing method. ...
- Step 6: Determining the final price.
The business life cycle is the progression of a business in phases over time and is most commonly divided into five stages: launch, growth, shake-out, maturity, and decline.
What is involved in business activity? ›
Business activity is any activity related to the purpose of making a profit. It is often divided into operating activities, investing activities and financing activities. Of these, operating activities tend to be considered the most important as they have the most direct impact on a company's performance.
How would you classify business activities? ›
The business activities are classified into three different types namely operating activity, investing activity, and financing activity.
What are key activities examples? ›
Key activity categories
- Quality control. Quality control is part of the research and development phase of production. ...
- Process selection. ...
- Customer feedback. ...
- Iteration. ...
- Software updates. ...
- Research. ...
- Documentation. ...
- Project management.
Short Answer. An organization is a group of people that works to achieve one common organizational goal, and its three major activities are operating, investing, and financing activities.
What is the most important activity for a business? ›
NOTHING is more important than sales. Your ability to create any kind of business rests on your ability to sell. If you are in business, then you are a salesperson. Nothing will wreck a business more quickly than a lack of sales.
What are the operating activities of a business? ›
Operating activities are the daily activities of a company involved in producing and selling its product, generating revenues, as well as general administrative and maintenance activities. Key operating activities for a company include manufacturing, sales, advertising, and marketing activities.
