A playbook for Generating Business Ideas

Definition of a Business
The Wikipedia definition of a business is as follows: “A business, also known as
an enterprise or a firm, is an organization involved in the trade of goods,
services, or both to consumers.”
The term “trade,” as used in the definition above, can be defined as “an
exchange of value.” Two or more parties partake in an exchange of value. The
exchange is made by choice by both parties. The exchange is always mutually
agreed to. It is illegal (and immoral) to take someone’s money, goods, or
services, without their consent.
People choose to partake in a trade because they believe they will derive value
from it. For example, you might pay for a ticket to see a concert because you
believe the concert will be entertaining and make you happy. Similarly, someone
might sell their old books that they have already read because they believe the
books, which have less value to them than they once did, could have greater
value to someone else. The monetary gain from the sale could then be applied to
acquiring something of greater value to the person.
The bookseller has no obligation to give away their books. The concert goer has
no obligation to pay for the concert ticket.
A trade can be an exchange of goods, services, currency, or some combination.
Below are several examples of a “trade” that illustrate the variety of possibilities:
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Jim cleans Joe’s room in exchange for Joe completing Jim’s math
homework.
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Jim pays Joe $50 to complete his math homework.
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Joe pays Jim $40 in exchange for a vacuum cleaner.
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Joe pays Jim $100 to give him a vacuum cleaner and clean his room.
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Jim cleans Joe’s room in exchange for Joe giving Jim a pencil.
Because all transactions in a free society are voluntary, the role of an
entrepreneur is to provide a good or service that is of value to people and that
people want to exchange for.

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To profit, the good or service must be worth more to people than it costs the
entrepreneur to produce.
Key Takeaways
The crucial components of the definition of a business:
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Trade or exchange of value
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Two or more parties
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Voluntary
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Goods, services, and/or currency can be exchanged.

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