VPS or virtual private server is one large physical server, that is divided into smaller servers that function independently in their own virtual server environment.
Consider it this way- You are living in 4 storey building. The owner of the building asks you to shift in one of his rented apartments with a few flatmates. But you deny this offer and ask if there is an apartment for you because you need privacy and you can afford to rent an apartment on your own. This is the basic principle of a VPS hosting. You have more resources available to you and you do not share them with others risking your needs or your privacy.
Benefits of a VPS hosting :
1. Better control over servers - As a business owner, you get total server space and control to take decisions of your hosting without really depending on anyone
2. No sharing but available resources - Your hosting will not share resources with anyone, so no chance that there will be any problems with respect to speed or efficiency
3. Privacy leads to security- Since your hosting service is private in nature. ie there are no issues with respect to any viruses/malware/ cyber threats from shared hosting (since it is not present) hosting is safe
Hope this helps