Every business (firm) or activity is an entity composed of three factors, and functions, having them in harmony.

These factors are:

Facility, Customer, Employee

Place(s), i.e.the facility, premises, such as a shop, a school, an office, a farm, a piece of land, etc.

Customer(s), i.e. the buyer, purchaser, consumer, household, i.e the person or other who approves and consumes the products(goods)/services of the seller/producer, creating the supply and demand circular flow.

Worker(s), the person(s) and/or their substitutes (machines) offering the services/work in the business, producing and/or selling goods or services.

Consumer/Customer factor is the strongest of the three, which regulates the behavior of the business (see operant conditioning and reinforcement).

In amateur activities (hobbies etc) the consumer/buyer is usually the same as the worker.

Exchange of satisfaction, interdependency: buyer, <--> seller

The buyer/consumer is the cause of existence of the producer/seller and

The producer/seller is the cause of existence of the buyer/consumer.

All the above form the holotes of business, i.e. different parts joined together forming an entity different from its parts.


Circular flow

Philosophy of Economics

Customer Equity