What is Business?

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Business

Business is defined as an activity involving regular production or purchase of goods and services for sale, transfer and exchange with an object of earning profit. Example: mill owners, transporters, bankers, traders, tailors, taxi operators etc. are doing business.

Basic features of Business

  • Person is engaged in manufacturing or buying and selling of goods and services.

  • Activities must be carried on regularly.

  • Sole objective of business is to earn profit.

  • Every business requires some investment in cash or kind or both.

  • Every business involves an element of risk.

Comparison of Business, Profession and Employment

Table of Comparison of Business, Profession and Employment
Table of Comparison of business, profession and employment

Basis

Business

Profession

Employment

Establishment

Decision to start business and compliance of legal formalities required

Membership of a professional body is essential

Enter into service contract with employer

Qualification

Specific qualification not required

Professional knowledge and training in same field is essential

As per needs of employer and job involved

Capital

Capital investment is must

Some amount of capital investment is required for establishment

No capital investment is required

Nature of work

Production or purchase

and sale of goods

Expert service

Performance of job

Return or reward

Profit

Professional fee

Wage or Salary

Risk

There is risk of loss

Risk of not getting sufficient fee

No risk

Motive

Profit motive

Service motive though fee is charged

Motive is to earn a livelihood

Importance of Business

  • Business improves standard of living of people by providing better quality and large variety of goods and services at right time and at right place.

  • It generates employment in country.

  • Utilizes scarce resources of nation and facilitates mass production of goods and services.

  • Enables people of a country to use quality goods of international standard.

  • Gives better return to investors on their capital investment.

  • Promotes social interest by providing tourist services, sponsoring cultural Programmes, trade shows.

  • Facilitates exchange of culture among people of different nations, in this way it maintains international harmony and peace.

  • Helps in development of science and technology.

Objectives of Business

Business objectives are something, which a business organisation wants to achieve or accomplish over a specified period of time. To make profit is primary objective of business. Business objectives also need to be aimed at contributing to national goals and aspirations as well as towards international well-being.

Classifying Objectives of Business

  1. Economic objectives: It refers to objective of earning profit and those which have a direct impact on profit-earning objective of business.

  2. Social objectives: Objectives which are desired to be achieved for benefit of society are called as social objectives.

  3. Human objectives: It primarily refers to objectives aimed at safeguarding interest of its employees and their welfare.

  4. National objectives: Objective of fulfilling national goals and aspirations comes under this category.

  5. Global objectives: facing challenges of global market is global objective of business.