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BUSINESS AND ITS FEATURES [ Read or Print]

BUSINESS AND ITS FEATURES

Q. : What is Business. Discuss the Characteristics / Features / Properties of business.
ANS:
CONCEPT OF BUSINESS:
Literally, the word “business” means the state of being busy.  Generally, the term business includes all human activities concerned with earning money. In other words, business is an activity in which various persons regularly produce or exchange goods and services for mutual gain or profit.   The goods and services produced or purchased for personal use are not included in “business”.
DEFINITION
1.  W. W. Perlick:
“Business is the economic activity of providing goods activity of providing goods and services to others for a financial return.”
2.   According to L. H. Haney
Business may be defined as human activities directed toward providing or acquiring wealth through buying and selling of goods.”
3.        James Stephenson says that:
“Every human activity which is engaged in for the sake of earning profit may be called business.”
FEATURES OR CHARACTERISTICS
1. MANAGEMENT:
Business may be started at small or large scale. It may be at country level or international level. It may be in the shape of retail shop or at whole sale basis. There is no condition for the size of business activity.

2. CREATION OF UTILITY
Utility is an economic term referring to that characteristic of a certain commodity, which can satisfy any human need.  Business creates utility, which gives benefit to the entire society
as well as the businessmen.

3. DEALING IN GOODS AND SERVICES
Every business deals with sale, purchase, production and exchange of goods and services for some consideration.

4. SATISFACTION OF HUMAN WANTS:
Business provides those goods and services, which are demanded by the consumers. In this way it earns profit through the satisfaction of human wants. So the satisfaction of human wants is another feature of the business activity.

5. ISLAMIC PROCESS:
Business is an Islamic way of earning living.  Income from business is known as profit, which is Rizq-e-Halal. The Holy Prophet Muhammad himself did prosperous business.

6. PROFIT MOTIVE:
Business is started for the sake of profit in private sector. Profit motive is driving force that puts the men, machines, material, methods, markets and money on work. All successful activities earn profit for the business.
7. ORGANIZATION STRUCTURE:
Success of business is possible through sound organization structure. The whole amount of work is divided into departments or sections. The employees are hired for each department. The employees are placed on jobs according to their abilities.
8. PRODUCTIONS OR PURCHASE OF GOODS
A businessman deals in production or purchase of goods.  These goods are supplied to the people.  So, it is necessary that more goods should be produced so that demand of people may be fulfilled.
9. REGULAR ACTIVITY OR TRANSACTIONS:
Business has a nature of regular dealings and series of transactions.  Only single transaction cannot be treated as business. Those transactions come under the scope of business, which are done repeatedly. So business activity is necessarily started on regular basis for profit earning.
10. RISKS AND UNCERTAINTY
Business involves a large volume of risk and uncertainty.  The risk element in business keeps a person vigilant and he tries to ward off his risk by executing his policies properly.
11. LIABILITY OF OWNERS:
The liability of the owners of the business depends upon the form of business organization. If it is sole proprietorship or partnership, the liability of the owners is unlimited but if it is Joint Stock Company the liability is limited.
12. Social Welfare
Business does not only satisfy the producer, but also the consumer when products are offered for sale at low prices in markets.
13. Employment
Business is a good source of employment for its owners as well as for other people, for example, employees, agents, transporters etc.

14. Capital:
Capital is the lifeblood of every business. It is the most essential and important element of business. In case of deficiency, loans can be taken from various financial institutions.

15. Element of Competition:
The element of competition is also found in every business. But the level of competition may be different depending upon the size and nature of the business transactions.

16. Public Support is Essential:
Public support is essential for business. There must be positive response form general public at the time of increase in price or shortage of product. Business cannot afford boycott of products.
17. INVENTIONS ARE POSSIBLE:
Inventions are possible in business. The new products are the result of inventions. The new models of products are available due to innovations. Thus inventions are the life bloods of business.
18. CULTURE IS FOLLOWED:

Culture is a system of values and norms that are shared among a group of people and represent a design for living. The goods and services must meet the cultural needs of people. The businessmen cannot overlook culture of consumers.

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