Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets owned by a business. Assets can be either physical or intangible. An example of value derived from a physical asset like a building is rent. An example of value derived from an intangible asset like an idea is a royalty. The effort involved in "harvesting" this value is what constitutes business operations. In general, the economic value of something is how much a product or service is worth to someone relative to other things (often measured in money). ... The term stakeholder has two distinct uses in the English language: The traditional usage, in law and notably gambling, a third party who temporarily holds money or property while its owner is still being determined. ... A business process is a recipe for achieving a commercial result. ...

Business operations encompasses three fundamental management imperatives that collectively aim to maximize value harvested from business assets (this has often been referred to as "sweating the assets"):

1. Generate recurring income.
2. Increase the value of the business.
3. Secure the income and value of the business.

All three imperatives are mutually dependent. The following basic tenets illustrate this interdependency: Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ...

• The more recurring income an asset generates, the more valuable it becomes. For example, the products that sell at the highest volumes and prices are usually considered to be the most valuable products in a business's product portfolio.

• The more valuable a product becomes the more recurring income it generates. For example, a Mercedes Benz can be leased out at a higher rate than a Toyota Corolla.

• The intrinsic value and income-generating potential of an asset cannot be realized without a way to secure it. For example, petroleum deposits are worthless unless processes and equipment are developed and employed to extract, refine, and distribute it profitably.

The business model of a business describes the means by which the three management imperatives are achieved. In this sense, business operations is the execution of the business model. The term business model describes a broad range of informal and formal models that are used by enterprises to represent various aspects of business, such as operational processes, organizational structures, and financial forecasts. ...

Generating recurring income

This is the most straightforward and well-understood management imperative of business operations. The primary goal of this imperative is to implement a sustained delivery of goods and services to the business's customers at a cost that is less than the funds acquired in exchange for said goods and services -- in short, making a profit. A customer is someone who purchases or rents something from an individual or organisation. ... This article or section does not cite any references or sources. ...

The funds directly acquired by the business in exchange for the goods and services it delivers is the business's revenue. For the tax agency in the United Kingdom of the same name, see HM Revenue and Customs. ...

The cost of developing, producing, and delivering these goods and services is the business's expenses. In accounting, an expense is a general term for an outgoing payment made by a business or individual. ...

A business whose revenues are greater than its expenses makes a profit. Such a business is profitable. Not True

 I WAS HERE!!! 

Securing the income and value of the business

Businesses stability rests on how successfully a business ensures its on-going ability to harvest value from its assets (i.e. protect its income generating capability and retain its value as a business). This on-going ability may depend on a number of or all of the following factors:

• Desirability or demand for its goods and services
• Ability of its customers to pay for its goods and services
• Uniqueness and competitiveness of its business model
• Control exerted over the quality and efficiency of production activities
• Public regard for the business as a member of the community

A business that can harvest a significant amount of value from its assets but cannot demonstrate an ability to sustain this effort cannot be considered a viable business.

See also

• Business process reengineering
• Operational risk
• Operational risk management

Business process reengineering (BPR) is a management approach aiming at improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations. ... According to §644 of International Convergence of Capital Measurement and Capital Standards, known as Basel II, operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. ... In business, the term Operational Risk Management (ORM) is the oversight of many forms of day-to-day operational risk including the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. ...

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