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What Is Business

Business involves the continuous production and distribution of goods and services to satisfy human wants. It aims to earn a profit through regular transactions between buyers and sellers. Key characteristics of business include the exchange of goods/services for money, dealing with risks and uncertainties in the market, and satisfying human wants through the provision of products and services. There are different types of businesses including services, manufacturing, and retail.

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0% found this document useful (0 votes)
127 views2 pages

What Is Business

Business involves the continuous production and distribution of goods and services to satisfy human wants. It aims to earn a profit through regular transactions between buyers and sellers. Key characteristics of business include the exchange of goods/services for money, dealing with risks and uncertainties in the market, and satisfying human wants through the provision of products and services. There are different types of businesses including services, manufacturing, and retail.

Uploaded by

Abrar Rana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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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.

Types of Businesses

There are many different types of businesses, but the three general types are:

1. service businesses
2. manufacturing businesses
3. retail businesses.

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