Definition of Business and its Types with Examples

Business:

Any lawful activity undertaken for the purpose of earning profit. OR

The organized human activity which production, buying & selling and providing services with the sole aim of earning profit. Business uses human, technological, and financial resources to earn profit through the satisfaction of its customers/consumers. There are two components of business:

1. Industry

2. Commerce

INDUSTRY:

Number of firm/factories producing same product in a given boundary OR

The product which are raised, produced by an industry are used by the final consumer or another concern for further production.

TYPES OF INDUSTRY

There are many types of industry; some of them are given below;

Extractive industries

Those industries which extract raise or produce raw material from the surface of the land. E.g. mining, fisheries etc...

Genetic Industries:

Those industries which are reproducing certain species of animals and plants and selling them in the market. E.g. cattle breeding, farms, plant nurseries etc.

Constructive Industries

Those industries which are constructing in building, cannels, bridges etc. are called constructive industries.

Manufacturing Industries

The industries which are converting raw material into finished goods such Bata Shoes Company, The Koh e Noor Textile Mill etc...

Service Industries

Those industries which create intangible goods which can’t be seemed or touched such as doctor, lawyer etc. services etc…

COMMERCE

Commerce is very important part of business. It can be defined as “all those activities which are related to transfer of goods from the place of production to the ultimate consumers”

There are two types of commerce.

Trade

Aids to Trade

TRADE

Buying and selling of goods is called trade. It is the exchange of goods and services among the buyers and sellers.

Types of Trade

Trade may classify as:

Internal Trade: the buying and selling in a boundary of a country is called internal trade.

Wholesale Trade: the purchase of goods in large quantities from producer and then resale to retailer.

Retail Trade: all the activities which are concerned with the sale of goods and services to the final consumer.

External (Foreign) Trade: any purchase and sell of goods between two country’s people is called foreign trade.

Import Trade: all those trade activities which are done to buy goods from another country and bring it to the homeland.

Export Trade: selling of goods and services to the foreign country buyer.

 AID TO TRADE:

All those supporting activities which are helpful in trade.  Following are the important types of aids to trade.

Transportation: the different means of transport help in carrying goods from the place of production to center of consumption. E.g.: railway, ships, airlines.

Insurance: the risk of damage of goods or other caused is covered by insurance. E.g. fire, flood, earthquake etc...

Ware Housing: the produced goods are stored in safe places and are released when there is demand in the market.

Banking: the commercial bank plays a very important role. They finance the traders for stock holding and transportation of goods.

Advertising: advertisement about the product has greatly helped the consumer in choosing the goods of their tastes. For example newspapers, TV and internet etc are the advertising sources.

Mercantile agent: mercantile agent is the chain of middle man, who acts as agent between the producers and the consumers. For examples wholesalers, retailers and brokers.