What Is Business?
Business is a form of economic activity which involves buying, producing and selling goods and services to make profit. It is an organised system which generates income and wealth for its owners and its workers. It also provides jobs and welfare to people.
In the present times businesses have created employment opportunities for a large number of people. They have increased their income, improved the standard of living and contributed to the development of the country.
It provides high-quality goods and services for the satisfaction of human wants at reasonable prices. It also plays a crucial role in the creation of new technologies, inventions and developments.
Businesses are essential in society, providing job opportunities and livelihood for many people all over the world. They create challenges, excitement and immense satisfaction for those who run them successfully.
Some of the activities involved in a business are: manufacturing, merchandising and delivering service. Hybrid businesses are those which perform all three functions at the same time.
Manufacturing: Making profit by producing and distributing raw materials to produce final products is called manufacturing. Some examples of such businesses are automotive companies, steel factories and shoemakers.
Merchandising: Procuring raw materials from manufacturers or wholesalers at a low price and then selling them at a higher price to make a profit is known as merchandising. This type of business is very popular in the food industry, as restaurants such as KFC manufacture their own recipes and sell them to consumers.
The ‘Profit Motive’ is the main reason behind every business. It helps a business to be sustainable and enables the owners to live a comfortable life.
In absence of profit motive a single transaction can be classified as a business but if it is carried out on regular basis with a consistent rate of profit, it becomes a business.
It is an important element of any business, because without it, the firm will eventually fail. Whether it is a small family-owned business or a multinational company, profits are the lifeblood of any organization.
They are the measure of a firm’s success and its credibility in the eyes of the public. They also determine its ability to get loans and raise fresh capital from the public.
These profits enable the firm to survive and grow by increasing the number of employees. They can also help the firm to improve its production capacity and increase the quality of its products.
Finance is a key part of any business, as it is the means by which the firm acquires its raw materials and equipment. It also includes the management of the capital budget and allocations for fixed and working capital.
A business can be either a sole-proprietorship, a partnership or a corporation. Each has its own set of characteristics and advantages.
The business can be in any industry or field of endeavor, and the owner may be a one person, a group of people or a corporation. The form of the business is governed by the legal regulations in that industry or field of endeavor.
