What is Business and its Features?

what is business: Friends, today we will know what is business and its features. Friends, you know that a human needs things to live. He performs the activity to fulfill these needs.

In other words, all human beings need different types of goods and services to fulfill their needs. So they keep themselves busy and they do some activity throughout life. Those activities involve some economic activities and some non-economic activities.

So friends, let us further understand all these activities as different forms of economic and non-economic activities:

Non Economic Activities

In simple words, activity has to be done without any economic benefit.

Non economic activities are those human activities which are perform to satisfy personal, social, religious and sentimental requirement without monetary expectations. For e.g. reading books, serving people, cooking by mother etc.

Economic Activity:

Friends, these are activities that involve the production, distribution and consumption of goods and services for the value of money or wealth at all levels within a society. In other words, to do activity for money or money’s worth.

For example:

Worker works in factory for employment. The merchant sets up the industry for profit and invests a lot of money. Also, gives the worker a job.

Thus, economic activities facilities earning livelihood.

Friends, you have now understood that every activity in economic activities deals only with money. So now you will also know how economic activity happens?

1. Business
2. Profession
3. Employment

1. Business:

In fact, business represents organized efforts by an individual or group of individuals. Because it functions by the business persons to produce goods and services and to market them. In return for this activity the trader makes a profit. In addition, it caters to many more complex needs of society.

The production of goods actually means making goods. Because it is an agricultural product or finished goods produced in factories. Apart from this, machines are also used along with manpower to produce goods.

For examples:

Farming on a piece of land and growing food grains is an example of agricultural production.

However, converting oil seeds into edible oil with the help of manpower as well as machine power is an example of manufacturing of the goods.

Friends, apart from production in the business, distribution of the product is also necessary to the final consumers. Therefore, distribution involves marketing of goods and services. In addition, it includes transportation, warehousing, advertisements that facilitate the transfer of goods from the producer to the final consumer.

2. Profession:

Profession is that part of economic activities under which a person uses his educational knowledge and special skill to render services for earning some income.
For example – Doctor, Lawyer, Chartered Accountant.

3. Employment:

It is an economic activity in which people work for others. There is employer-employee relationship. Employer is the person who offers the job and the person who accepts the job is called employee. Remuneration and terms and conditions are agreed by both of them.

Features of Business:

Friends, the business of economic activity has many characteristics which are the backbone for the economy of any country. So let’s try to know those characteristics:

Every dealings in Goods and Services:

In fact, every type of business transaction deals with goods or services. Because, trade does not happen in the absence of goods and services. These goods are consumer goods or capital goods. However, services created for a business purpose are intangible that are necessary for doing business. For example: banking industry, transportation, insurance etc.

Goods are two types:
Consumer goods – Rice, wheat, tea, milk, pencil, book etc.
Capital goods – plant, machinery, furniture, etc.

Profit Motive:

Profit in business is the backbone of business, which keeps the business running for a long time. The basic purpose of the business is to make a profit from its activities. Businessmen try to maximize profit by increasing sales volume or reducing our costs. The amount of profit varies from business to business.

Production of goods and services:

Before the exchange of goods and services, they must be produced by commercial enterprises. For the purpose of further selling it to consumers for profit, goods are either manufactured or purchased from a supplier.

Exchanges of commodities and services:

In fact, directly or indirectly in the business involves the transfer of goods and services with the value of money or money. Because, here is the exchange with currency exchange money.

For example:
Buying Notebook for cash.

On the other hand, in the case of commodity, the exchange of goods and services to some other items and services.

For example: wheat is exchanged for rice.

If you produce goods for self consumption. In other words, if a costume is stitched for a daughter, it will not be called a business activity, but to set the clothes in a sewing shop and taking a sewing fees for it is a business activity.

Similarly, if the luggage is given in donation or given in the form of gifts, it will not be considered business activity.

An Economic Activity:

Business is an economic activity as it is meant to earn money or livelihood. Also, it is not because of love, affection, feelings, emotion etc.

Minimum Two Parties:

Every business transaction involves an exchange. A minimum of two parties are required for the exchange – seller and buyer. A business transaction is a result of an agreement between the buyer and seller that occurs in oral or in writing.

Regularity in Transaction:

Friends, if a person sells his own motorcycle and earn profit then. it will not be as a business activity. But, if he is a motorcycle dealer so, he sells and purchases motorcycles regularly then, it is as a business activity.

Thus, every business requires regularity in transactions. Because, one single transaction does not constitute business.

Uncertain Return:

If you think that there will always be profit in your business, then you are wrong. A businessman has to see both situations in it. The returns are never anticipated or the guaranteed businessman makes a profit or suffers a loss.

Risk element:

Risk is the key element of every business that is expose to losses. Because it is due to some adverse or undesirable event. There will be some risk in every business. The intensity of the risk can be reduced but it cannot be avoided.

Some factors are beyond the control of businessmen such as changes in consumer tastes – dialysis, fashion, changes in production methods, fire, theft, natural disaster etc. No businesses is free. From the above factors.

Customer satisfaction:

Customer satisfaction is the ultimate objective of all economic activities and businesses is no exception. Modern businesses believes in satisfying customers by providing quality products and services at reasonable prices. The businesses aims to create and retain customers.

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