Business is an economic activity, which is related
with continuous and regular production and distribution of goods and services
for satisfying human wants.
All of us need food, clothing and shelter. We
also have many other household requirements to be satisfied in our daily lives.
We met these requirements from the shopkeeper. The shopkeeper gets from
wholesaler. The wholesaler gets from manufacturers. The shopkeeper, the
wholesaler, the manufacturer are doing business and therefore they are called
as Businessman.
Definitions of Business:
Stephenson defines business as, "The regular
production or purchase and sale of goods undertaken with an objective of
earning profit and acquiring wealth through the satisfaction of human
wants."
According to Dicksee, "Business refers to a form of activity
conducted with an objective of earning profits for the benefit of those on
whose behalf the activity is conducted."
Lewis Henry defines business as, "Human activity
directed towards producing or acquiring wealth through buying and selling of
goods."
Thus, the term business means continuous
production and distribution of goods and services with the aim of earning
profits under uncertain market conditions.
Features of Business:
Characteristics or features of business are
discussed in following points :-
1. Exchange of goods and
services
All business activities are directly or indirectly
concerned with the exchange of goods or services for money or money's worth.
2. Deals in numerous
transactions
In business, the exchange of goods and
services is a regular feature. A businessman regularly deals in a number of
transactions and not just one or two transactions.
3. Profit is the main Objective
The business is carried on with the intention
of earning a profit. The profit is a reward for the services of a businessman.
4. Business skills for economic
success
Anyone cannot run a business. To be a good
businessman, one needs to have good business qualities and skills. A
businessman needs experience and skill to run a business.
5. Risks and Uncertainties
Business is subject to risks and
uncertainties. Some risks, such as risks of loss due to fire and theft can be
insured. There are also uncertainties, such as loss due to change in demand or
fall in price cannot be insured and must be borne by the businessman.
6. Buyer and Seller
Every business transaction has minimum two
parties that is a buyer and a seller. Business is nothing but a contract or an
agreement between buyer and seller.
7. Connected with production
Business activity may be connected with
production of goods or services. In this case, it is called as industrial
activity. The industry may be primary or secondary.
8. Marketing and Distribution
of goods
Business activity may be concerned with
marketing or distribution of goods in which case it is called as commercial
activity.
9. Deals in goods and services
In business there has to be dealings in goods
and service.
Goods may be divided into following two
categories :-
1.Consumer goods : Goods which are used by final consumer for consumption are
called consumer goods e.g. T.V., Soaps, etc.
2.Producer goods : Goods used by producer for further production are called
producers goods e.g. Machinery, equipments, etc. Services are intangible but
can be exchanged for value like providing transport, warehousing and insurance
services, etc.
10. To Satisfy human wants
The businessman also desires to satisfy human
wants through conduct of business. By producing and supplying various
commodities, businessmen try to promote consumer's satisfaction.
11. Social obligations
Modern business is service oriented. Modern
businessmen are conscious of their social responsibility. Today's business is
service-oriented rather than profit-oriented.
