BUSINESSDEFINITION AND

CHARACTERISTICS

Q1.DEFINE THE TERM BUSINESS

BUSINESS IS AN ECONOMIC ACTIVITY WHICH INVOLVES PRODUCTION AND DITRIBUTION OF GOODS AND SERVICES

IN WORDS OF URWICK AND HUNT

“ BUSINESS IS ANY ENTERPRISE WHICH MAKES DISTRIBUTES OR PROVIDES ANY ARTICLE OR SERVICE WHICH THE OTHER MEMBERS OF THE COMMUNITY NEED AND ARE ABLE AND WILLING TO PAY FOR “

2. WHAT ARE THE CHARACTERISTICS OF BUSINESS

ECONOMIC ACTIVITY

CREATION OF UTILITY

PROFIT MOTIVE

REGULAR DEALING

RISK

DEALING IN GOODS AND

SERVICES

SALE , TRANSFER AND

EXCHANGE

Economic activity

As its main motive is to earn money , wealth and profit

It helps in satisfying needs of businessmen and their families on one hand and the general public on the other

It helps in economic development ( increase in business, more dev. of country )

Creation of utility

Business satisfies human wants by creating form utility, place utility and utilty of time

Utility of form- changing the form and making it useful for consumption

Utility of place- transported from one place to another as per the demand

Utility of time- storage in warehouse to made the goods available when required

Profit motive

It is the essence of business Further capital is generated through

profit made in business For growth and expansion , profit is

necessary However, some ethics must also exist

Risk

Risk or Uncertainty of return refers to the lack of knowledge relating to the amount of money that the business is going to earn in a given period.

Every business involves money (capital) to earn profits

Now a days Risk is covered by insurance but primary risks are always there in business

Regular dealings

Business cannot be stagnant, there has to be continuity and regularity

Once occurred activity cannot be called business

Student selling snacks in the school fair or selling his old books to junior cannot be called businessman

But, for a student giving tutions to younger student for money regularly will be his business

Sale, transfer or exchange

If goods are produced not for the purpose of sale but for personal consumption, it cannot be called a business activity.

Selling goods and services for price is the neccesity

CAKE PARLOUR, MANISH DRINK CORNER , LEKHIKA are well known shops. Imagine if they start consuming their goods. What will happen?

Parts of business

BUSINESS

INDUSTRY

PRIMARY SECOND

ARY

COMMERCE

TRADEAIDS TO TRADE

Subdivision of

business

Primary industries Extractive industries FARMING

MINING

Lumbering

FISHING

GENETIC INDUSTRIES POULTRY

CATTLE BREEDING

FISH HATCHERY

Plant nursery

Secondary industries TYPE A- Manufacturing industries

Types of manufacturing industries

ANALYTICAL INDUSTRIES

SYNTHETICAL

PROCESSING

ASSEMBLING

TYPE B- CONSTRUCTION INDUSTRIES

Ship building

Light industries

A manufacturing device typical of light industry (a print machine).

Some facts

Heavy industry is industry that involves one or more characteristics such as large and heavy products; large and heavy equipment and facilities (such as heavy equipment, large machine tools, and huge buildings);

Light industry is industry that is usually less capital intensive than heavy industry, and is more consumer-oriented than business-oriented

http://en.wikipedia.org/wiki/File:Pad_printing_machine.JPG