Exactly what does a business do on a daily basis? In this lesson, you’ll learn about the day-to-day operations of a business and the people who keep it running smoothly.
Day-to-Day Business Operations Defined
Day-to-day business operations are the activities that a business and its employees engage in on a daily basis for the purposes of generating a profit and increasing the inherent value of the business as a going concern.
The primary purpose of a business is to generate sufficient income from its activities to pay its expenses, provide a profit to its owners and increase the intrinsic value of the business as an income-generating asset. Employees accomplish this goal by performing specific functions.
Functions of Day-to-Day Business Operations
Line groups perform tasks that are directly related to accomplishing the company’s objectives. They are involved in the revenue generating process of the company. For example, in a manufacturing business, the line workers are responsible for the production of the products that the company produces for sale. In a service-orientated company, the line workers are the individuals responsible for serving its customers (think of accountants, doctors, stockbrokers, lawyers, store salespersons or house painters). In other words, the line employees make the money and add value to the company as an asset by generating profit and increasing market share.
Staff groups are responsible for supporting the line groups. Staff is responsible for creating and maintaining the business’ infrastructure. They provide advisory services and act as controls on the line groups. Examples of staff functions include the legal department, human resources department and accounting department. While staff activities do not directly relate to the generation of the business’ profits and achievement of its goals, they provide needed support to the line groups to help them generate revenue and accomplish the business’ goals.
Examples of Day-to-Day Business Operations
Let’s walk through the day in the life of a manufacturing business. We’ll take a look at what’s going on with the line groups first. Down on the production floor, workers are clocking in and will spend the next eight hours on an assembly line assembling photocopiers.
Upstairs in a different part of the facility, a group of salespeople are cold calling businesses in their target market for sales appointments in an attempt to sell copiers. Some are out of the office on sales presentations. Another group of salespeople are making pitches to various distribution channels, such as office supply stores, to have the copiers placed in their stores. Finally, a third group of salespeople are attempting to gain government contracts with local, state and federal agencies.
Now, let’s head over to the staff side for a while. The human resources department is busy screening applications, setting up interviews and interviewing applicants to fill both sales and production vacancies with the company. The accounting department is running through last month’s numbers to determine the company’s income and expenses. They are also entering payroll data and keeping track of payroll, income and sales tax obligations. The legal department is looking over a patent application prepared by outside counsel related to a new copier process developed by the company’s research and development department.
Let’s review. Day-to-day business operations are the daily activities of a business with an aim to generate sufficient revenue to earn a profit for the company and increase the value of the business. Business activities can be broken down into line functions and staff functions. Line functions involve the core income generating functions of the company, whether it be the production of goods or providing services to customers. Staff functions support line activities and include tasks performed by human resources departments, legal departments and accounting departments.