Historically, the term business referred to activities or interests. By extension the word became (as recently as the 18th century) synonymous with an individual commercial enterprise. It has also taken on the more general meaning of a nexus of commercial activities. People establish businesses in order to perform economic activities.

With some exceptions (such as cooperatives, corporate bodies, non-profit organizations and institutions of government), businesses exist to produce profit.

In other words, the owners and operators of a business have as one of their main objectives to receive or generate a financial return for their time, effort and capital.

One can classify businesses in many different ways. Service businesses offer intangible products and typically have different, usually smaller, capital requirements than manufacturers. Distributors will have different inventory control needs than a retailer or manufacturer.