What is Business? Meaning
Human beings are continuously engaged in some activity or other in order to
satisfy their unlimited wants. Every day we come across the word 'business' or
'businessman' directly or indirectly. Business has become essential part of
modern world.
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 :-
- Consumer goods:
Goods which are used by final consumer for consumption are called consumer
goods e.g. T.V., Soaps, etc.
- 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.
business?
For some that seems like eons ago while others may just now be in the
beginning stages of their business. For many those ideas never escape
the confines of the cranium and some will scribble ideas on a napkin as
they sit at their favorite watering hole. Hopefully those plans
eventually made it to paper or, better yet, became a formal business
plan.
