Last updated: July 11th, 2019.
Scope Business involves all those human activities which are concerned with the earnings of profit in the whole field of commerce and industry and aids to trade e.g. banking, transport, insurance, promotion, warehousing etc.
Activities involved in business;
i) Buying goods and services
ii) Selling goods and services
iii) Storing or warehousing goods
iv) Handling money and keeping records of transaction (i.e. buying and selling)
v) Packaging and dividing products into small quantities
Characteristics of Business
The essential characteristics of business are as follows:
i) Entrepreneurial in nature: – There must be someone to take initiate for establishing a business.
ii) Deals with goods and services: Every business enterprise produces and/or buys goods and services for selling them to others
iii) Sale or exchange of goods and services (in business the goods and services produced or purchased must be exchanged for money or for goods)
iv) Requires investment: Every business activity requires some amount of investment in terms of land, labour or capital.
v) Aims at earning profit: Business activities are performed with the primary objective of earning income by way of profit.
vi) Business involves risks and uncertainties of income: Risk implies the uncertainty of profit or the possibility of loss. the outcome of invested capital is always uncertain because the future is unpredictable
vii) Art as well as science: Business is an art because it requires personal skills and experience
viii) Economic activity: Business is primarily an economic activity as it involves production and distribution of goods and services for earning money
ix) Continuity in dealings: Dealings in goods and services become business only if undertaken on a regular basis
x) Organisation: – Every enterprise needs an organisation for its successful working.
xi) Creation of Utility: Business crates various types of utilities or goods so that consumers may use them
xii) Satisfying Social Need:- The business should aim at serving the society at large