nc efi placeholder

The business sector is the sector of the economy that consists of private companies. This sector excludes economic activities carried out by the government and non-profits. Businesses conducted in this sector can be divided according to the division of the economic sector by activity, namely primary, secondary, tertiary, and quaternary. The government is a major consumer of goods and services. It is the largest buyer of these products in many countries worldwide. This means that it has an enormous impact on the economy by buying large quantities of things like food, clothing, vehicles, and machinery. By purchasing these items from private companies, the government helps create jobs for people who work in those industries and also stimulates economic growth by providing funding for research & development (R&D) projects.

Provide Goods And Services

You might be wondering why the government needs to establish a business. The answer is simple: government departments need goods and services just like any other company or individual, but they are often unable to buy them directly from private companies as they do not have enough money in their budgets. To get around this problem, many governments set up a public sector business that can provide goods and services to all departments within the same organization at very competitive prices. This helps to keep costs down while ensuring the best quality of service possible for taxpayers’ money.

Create Employment Opportunities For The Citizens

The primary reason for establishing a public sector business is to create employment opportunities for the citizens of the country. The government should provide jobs for its people as this is one way to reduce poverty and improve their living standards. The second important reason is that it will increase the tax base of the country, which helps in generating more revenue for running government services efficiently and effectively. And lastly, this will provide an additional source of income for individuals who may not be able to find jobs elsewhere.

Make A Profit To Cover Costs And Provide Funds

The purpose of establishing a public sector business is to make a profit. Profit is the difference between revenue and cost, where revenue is what you earn from selling your products or services, and cost includes all expenses related to running your business (including salaries). To cover these expenses, as well as provide funds for expansion, improvement, and research, you must make enough money so that your company has excess cash at the end of each year. In the public sector, a business’s purpose is to make a profit. This means that revenue must be greater than the cost to cover all of your expenses and provide funds for expansion, improvement, and research. On the surface, this may seem like an obvious statement but it is important for you as an entrepreneur to understand what goes into making money as well as how much money you need to grow your business successfully.

Generate Income Contributing To National Economy

The public sector business is established to generate income that helps in contributing to the national economy and development. It contributes to the economic growth of a country by generating revenue for the government through taxes, duties, and other forms of payments made by consumers. The money so generated can be used for covering costs incurred by running businesses or providing funds for expansion, improvement, and research activities. This will also help in improving the standards of living among citizens through the provision of affordable basic goods like foodstuffs or clothing at affordable prices.

Organization Set Up A Business Selling

There are many reasons why an organization would want to set up a business selling its goods or services to the government. Public sector businesses can be created for several purposes, including:

  • Government contracts – Many organizations can win government contracts and then use those funds to generate revenue for themselves and create jobs. These contracts may involve creating products for use by the military or other public services, such as infrastructure projects that require large amounts of materials like cement or steel beams. The vast majority of these businesses are small-scale operations that don’t require much capital investment; however, some larger ones might need significant startup costs before they can begin generating income from their sales efforts (and thus making money).
  • Revenue generation – Even if you aren’t interested in winning government contracts yourself as part of your business model, there are still ways for you to benefit from this type of relationship! For example, You could sell goods directly through Amazon Prime Now (or whatever delivery service works best for where people live) so people don’t have to wait days/weeks/months after ordering something online because there wasn’t enough stock available at one location.


In conclusion, there are many reasons why an organization would want to set up a business selling its goods or services to the government. The public sector is a huge market and can provide financial stability for any company looking to expand into new areas of operation. However, due diligence is required before entering into such an agreement as it may not be suitable for all types of businesses.