What is business? Concept|Objectives|Characteristics|Types

What Is a Business?

Any Legal activity which aims to earn a profit is called business 

Introduction to Business

A business is an organization comprising people who struggle together to achieve common objectives and goals in a proper way. It is important for an organization to have a vision that implies achieving the company goal. A good organization needs to create an envi­ronment where people want to work and develop themselves through coaching, feedback, and information sharing. In order to enhance the image, the organization should communicate the key messages, both internally and externally, and gain commitment to its principal goals and achievements.

What is business? Concept|Objectives|Characteristics|Types

Definition of Busines

The term “business” also refers to the combined efforts and activities of individuals to produce goods and services and sell goods and services for making profits.

Example of the Business

Hasnain is a person who opens the shop of the cloths his aim to earn the profit for the sale of the clothes. 

What is business? Concept|Objectives|Characteristics|Types

Business Structure

Most of the businesses organize themselves from these roles and responsibilities. The most common structures include in which sole proprietorships, partnerships, corporations, and limited liability companies with sole proprietorships being the most common structure of the organization.

Types of the Business

 1.   Economic Activities:

They are related to the distribution, production, and consumption of goods and services. They enable people to earn a reasonable profit. nowadays online business become popular in the market. Such income-generating activities can be classified into three important categories.

The categories are:

(i) Business,

(ii) Profession, and

(iii) Employment.

What is business? Concept|Objectives|Characteristics|Types

(i) Business:

Any legal activity which aims to earn a profit. These involve the production and exchange of goods and services on a regular basis. Risk and uncertainty are ever-present in every type of organizational activity.

(ii) Profession:

It may be defined as any occupation which involves offer­ing of skills, the expertise of special nature (to clients against a fee) acquired through years of education, training, and hard mental labor (e.g., doctors, advocates, tax consultants, auditors, etc.).

(iii) Employment or Service:

The term employment refers to the work done by a person (called an employee) reporting to an employer and carrying out assigned work according to the terms and conditions of a contract in any organization or without any organization. The contract specifies the payment to be made in terms of salary, bonus, and other service benefits for obtaining the services of an employee in the organization. The employee or worker is expected to complete the task that is entrusted to him on a temporary basis or on a permanent basis for jobs and services.

2. Non-Economic Activities:

Some are activities that are without any profit motive. There is no intent to make money. People include in non-economic activities out of sympathy, love, charity, reli­gious feelings, etc. These are the non-economic activities of some type of organization.

What is business? Concept|Objectives|Characteristics|Types

Features of Business

1)  Dealing in Goods and/or Services:

The first and basic important feature of the business is that it deals in goods and/or services. The goods may behave consumer-goods or industrial goods or capital goods. The consumer goods are meant for direct or indirect consumption of the users. For instance, eatable goods are grouped under direct and immediate consumption and finished, and industrial or capital goods are meant for being used for the purpose of production or making someone new thing e.g. machines, tools, equipment, etc. These goods may be called producer’s goods.

Services goods include the supply of electricity, water, gas, finance, insurance, banking, advertising, warehouse, transporting, etc. Thus, dealing in goods or services is a common and important feature of any type of organization.

What is business? Concept|Objectives|Characteristics|Types

2) Exchange and Production of Goods and Services:

Production of goods and services of any type and their exchange for the value of the price is an organization. All activities which are carried under love and affection, charity, or gratitude not for value or price are non-business activities. A business involves the production and/or exchange of goods and services only for some value or price. Any activity without some value or price (profit) is not an organizational activity.

3) Profit Motive:

Behind every organization, there is a making ‘Profit Motive’. In absence of a profit motive, any activity cannot be called a proper business. People engage themselves in business primarily with a view to earn some profit and make wealth. If quality goods and services are provided, society is ready to pay a little bit more, and thereby an organization can earn more profit continuously. There is a direct relationship between the satisfaction of consumers and goods and services provided to them and the source of the making profit for the organization.

4) Existence of Risk and Uncertainty:

All types of legal and non-legal business activities involve an element of risk and uncertainty. Fast, multiple, and ever-growing changes that are taking place in the world of business and industry play a major role in raising risk and uncertainty in the organization.

For instance, changes arising within and outside the enterprises like changing technology, changing consumers tastes, needs, fashion,  behavior, group competition due to globalization, faulty managerial decisions, faulty planning are causing and creating heavy risks and uncertainty in business which directly affect the life and survival of the business.

What is business? Concept|Objectives|Characteristics|Types

Characteristics of Business

  • Human Practice

In the organization totally work is done by the human being

  • Goods and Services

The important characteristic is to sell the goods and services in the organization

  • Earning Profit

Organizations just aim to earn profit from their business

  • Capital

Capital is an important part of the company without capital we not start the business.

  • Existence of the Customers

We are starting our business with the existence of the customer

  • Employment opportunity

With the help of the business, the employment opportunity is created

Requirements of the Business

The requirement of the company is Capital, Location, Business idea, Labour, Material, and other resources to need to start the company.

Functions of Business

The primary function of the organization is to earn profit and the secondary function of the organization is to help the people.

What is business? Concept|Objectives|Characteristics|Types

Objectives of the business

There are some important objectives of the company are:

  • Earning Profit

The main objective of the company is to earn the profit

  • Employment Opportunity

The objective of the company is to create the employment opportunity

  • Investment Opportunity

Through organizations, peoples invest their capital and earn lots of money

  • Use of Resources

The objective of the business is to utilized the country resources

  • Batter Standard of life

Through the company, the standard of the people and their living style is better and improved

What is business? Concept|Objectives|Characteristics|Types

some of the sites help to understand the function and importance give the idea to how to start any type of the business. some popular sites are Pinterest, info24hrs.info, and rozee.pk

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