An ordinary sense Business means busyness or state of being busy.
In economic sense Business means all activities which are carried on for the purpose of earning profit.
Definitions of Business
- JAMES STEPHENSON
“Every human activity, which is engaged in for the sake of earning profit, may be called business.”
“Business is the gainful producer through which individuals and group exchange goods and services among themselves.”
From above definitions we conclude that business means production, purchase and sale of goods, services and ideas for the price.
Nature and Characteristics of Business
Business boosts up the competition in the market. Business retains the competition on itself in the shape of quality product and selling techniques.
Business creates the demand of the products in the market. Normally business produces those goods which are demanded by the people. If business produces such goods which are not liked and demanded by people then it may suffer loss.
Every business must involve an entrepreneur. Entrepreneur means a person who starts the business.
Finance plays the role in business as blood in body. Earning capacity of business mainly depends upon finance. Finance is needed by business to meet the requirements of fixed and working capital.
Money plays important role in the business. Without the use of money, a business cannot be run. So every business must involve money either in cash or in other kind. Money may be used at the time of purchase, sale or expenses.
Marketing success is necessary for the success of business With the help of the marketing we come to know what type of goods are demanded by the people and at what price.
The nature of every business is not same. Such as some businesses deal in the consumer goods like cloth, shoes, stationery etc., and some in producer goods like machinery etc.
Another important characteristic of business is the organization. Success of business depends upon the efficient organization. The workers co-ordinate their work to obtain successful business objectives.
Every business must deal in goods or services. Some businesses deal in capital goods like machinery and some in consumer goods like garments, shoes etc. Some businesses provide the services like transportation etc.
- Planned system
Businesses are run with the well planned system. Without well planned system a business cannot make progress.
The primary object of every business is to earn profit. If any work is done free of cost, it cannot be called business.
In business risk always exists because of variation in market conditions.
Every business supplies the goods or services to the society. If any thing is produced or purchased for personal use then this activity is not treated as business.
- Services of deal
There must be a series of deal in business. It means there must be regular work of sale and purchase of goods and services For example, if a person sells furniture of his personal use and earns profit, it is not called business.
Every business must sell the goods and services to people for priceProfit of each business depends upon its sale
A business must produce the goods according to the taste of people in order to satisfy them If business fails to do so then it may suffer loss.