What Is Business
What Is Business
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
All business activities are directly or indirectly concerned with the exchange of goods or services for money or
money's worth.
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.
The business is carried on with the intention of earning a profit. The profit is a reward for the services of a
businessman.
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.
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.
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.
Business activity may be concerned with marketing or distribution of goods in which case it is called as
commercial activity.
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.
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.
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.