definition and characteristics of business

definition of business:

The term business has been defined by various authors. Some of the selected definition are given below:

According to L.H Haney, “Business may be defined as human activity directed towards providing or acquiring wealth through buying and sellings.”
Urwick and Hunt describes “Business as an enterprise which makes, distributes or provide my article or services which the other members of the community needs and are able and willing to pay for it.” According R.N Owen, business includes all the commercial and industrial activities that provides goods and services to the people with an objective to earn profit.

Simple definition of business:

"The organized human activity which is concerned with the production, buying & selling and providing services with the sole aim of earning profit."
business uses human, technological, materials, and financial resources to earn profit. through the satisfaction of its consumer/ customers.

characteristics of business:

characteristics of business

The activities termed business has the following characteristics.
1} Deals in goods and services: Every business whether it is carried on a small or on a large scale deals in goods and services. The goods may be consumer goods like cloth, shoes, pens etc., or producer goods like machinery or it may take the shape of services like the supply of electricity, water, gas transportation of goods, etc.

2) ENTERPRENEURE: The person who develop the idea to a particular business, combine the resources and assume risk of loss and profit.

3) ECONOMIC ACTIVITIES: the activities which are involved in the production or distribution of goods and services for economic motive are a part of business. Any activity undertaken for personal consumption or are exchanged free, fall outside the scope of business. For instance, if a shoemaker makes a pair of shoes and wears himself, it will not be a business. However, if he makes shoes and sells them to the customers for money, it is then his business. So business covers only economic activities.

4) SERIES OF DEALS/REGULARITY: When a firm takes up manufacturing or distribution of goods or providing of services of profit motive, there should be series of deals in it. It should be performing over and over again. A student, for instance, selling his books to the shopkeeper will not be doing a business. However, if he purchases the book and sells them in his spare time regularly to seek profit, it does constitute a business.

5) PROFIT: The primary aim of business is to earn profit. If an enterprise in to exist for a longer period, it must yield profit. Profit thus is the driving force of every business activity.

6) ELEMENT OF RISK AND UNCERTAINTY: There is an element of risk and uncertainty involved in every business. If an organization in not able to forces or control or minimize the risk involved in business, it suffers losses. The main risks involved in business operation are 1. Competition 2. Change in taste 3. Outmoding of a product 4. Theft 5. Flood 6. Earthquake 7. Fire 8. Marketing misjudgment 9. Customers disliking 10. Strikes. Etc.

7) CAPITAL: Every business whether it is small or large cannot operate without capital. Money is required for investment in fixed assets such as land, building machinery etc. Money is also needed for working capital such as purchase of raw material, payment or wages, electricity, gas bills etc.

8) CREATION OF UTILITIES: An important characteristic of business is the creation of utilities. The businessman transport goods from a place where it is less needed to a place where it is more required. He also converts raw material into semi finished and finished goods in order to make them useful for the consumers.  The businessmen, consumers and the society all benefit by the creation of place, form and time utilities in goods, “ in short, business combine human, material, technological, and financial resources for profit.”
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