The Word Business Means Busyness or The State Of Being Busy. A Person May Be Busy In Reading, Writing, Painting And Playing Because Any Of These Activities May Bring Him Money, Prestige, Power Or Any Other Kind Of Satisfaction But In Economics Science, This Word Means Work, Efforts And Acts Of The People Which Are Connected With The Production Of Wealth.
Every Human Activity Which Is Engaged In For The Sake Of Earning Profits May Be Called Business. (James Stephenson)
Any Of Those Activities Connected With The Production And Exchange Of Goods And Services And The Financial Affairs Connected With These Activities. (Clark And Gottfried)
Features or Characteristics
Essential Features of Business Are As Follows
1. Regular Transaction.
Business Activity Is The Name Of Regular Dealing. A Single Transaction Involving Buying And Selling Does Not Become A Business. Recurring Nature And Regularity Is As Essential For Business As Oil For The Running Of Car/ Machinery.
2. Goods and Services.
Business Consists Of Transactions Retaining To Goods And Services The Term Goods Include Both Consumer And Industrial Goods. The Services Refers To Intangible Items Like Transportation Of Goods And Passengers And Supply Of Electricity.
3. Profit Motive.
Any Addition Over And Above The Cost Is Called Profit. Normally, A Business Is Started For The Sake Of Profit. It Is An Important Feature Of Business. Profit Is Also Essential For Survival And Development. In Fact It Is Award For The Individual Ability Of The Businessman And Also For The Services He Renders To The Community.
4. Element of Risk.
A Business Is Not Free From Risk Of Loss. The Future Is Uncertain. The Loss May Arise Any Time Due To Change In Customer’s Taste, Choice, Preferences. The Loss Of Business Depends On Many Factors On Which He May Not Have Control And Hence Business Involves An Element Of Risk And Uncertainty.
5. Source of Employment:
Business Is The Source Of Employment For The Owners Of The Business As Well As For The Persons Of Society At All. Business Provides Employment In The Form Of Jobs Such As Bankers, Transporters And Agents Etc.
Capital Or Finance Is The Essential Part Of A Business. It Is The Foundation Of A Business Organization. Owner Has To Invest Sufficient Amount Of Capital In The Business For The Life Of Business Working. Capital In The Business Has Two Sources One Is Owned Capital And Other One Is Borrowed Capital.
Management Is The Back Bone Of A Business. Management Generates Smoothness In The Activities Of A Business. It Makes Effective Combination Of Factors Of Production (Land, Labor, Capital And Organization Etc.). Mangers Of Different Departments Control Business Activities To Achieve Business Object.
In The Recent Time Of Business, There Is Tough Competition Among The Businesses. Technology Plays Vital Role In The Development Of The Business. Invention And Innovation Is Done I The Business Through Technology. These Changing In The Business Bring Lots Of Business Opportunities For A Business.
9. Creation Of Utility:
That Is The Main Feature Of The Business That Generates Utilities For The People Of The Society. Business Provides Utility In The Various Ways Such As Utility Of Place, Form And Ownership. These Utilities Satisfy The Customer And It Is The Key Of Success In The Business Market.
10. Creation Of Customers:
Profits Are Not Earned By God Or By The Forces Of Nature. They Are Generated Through Business Activities By Satisfying The Needs And Wants Of The People Living In The Society. A Businessman Can Earn Profit Only When He Has Many Customers For Buying And Paying Price For His Goods And Services. Customer Is The Foundation And Life Of A Business.
The Culture And Civilization Cannot Be Ignored During The Process Of Business Because A Custom Always Considers Hi Culture And Social Values In Business Dealing. So, For Earring Profit A Business Has To Produce Such Goods And Services Which Are As To The Culture And Society.
Competition Is Found In All Type Of Businesses. But Competition Level May Be Different, Depending Upon The Size And Nature Of Business Transactions. Completion May Be Monopolistic Or Perfect Etc. So, Healthy Competition Is Very Essential For The Quality Products At Reasonable Prices.
13. Economic Activity:
Business Includes Only Economic Activities. Economic Activities Mean Exchange Of Goods And Services With The Purpose Of Earning Money. It Is, Therefore Essential That The Activity Must Be Economic. It Any Activity Is Under Taken Without Any Profit Motive Then It Will Be Not The Part Of Business.
14. Size of Activity:
Business May Be Started At Small Or Large Scale. It May Be At National Level Or International Level. It May Be In The Shape Of Retail Or Wholesale Or Import, Export Or Entrepot Etc. There Is No Condition For The Size Of Business Activity. Size Of Business Largely Depends Upon Capital Of The Business Larger The Capital, Larger The Business And Smaller The Capital Smaller The Business.
15. Liability of Owner:
Liability Of The Owner Of Business Depends Upon The Type Of Business Organization,. If The Business Is Ole Trader Ship Or Partnership Then Liability Is Unlimited But If The Business Is A Joint Stock Company Then All The Owners Have Unlimited Liability Up To Their Capital Investment In The Company Business.
16. Consumer’s Satisfaction:
The Aim Of The Business Should Be Earning Of Profit But It Is Essential That At The Same Time Business Must Consider The Consumer’s Satisfaction Level. It Is Useless The Think About Profit Without The Motive Of Fulfilling Consumer’s Satisfaction. Even The Expansion Of Business Depends On It. So, The Business Which Satisfies Its Customers By Their Products Can Be Stay For Long Time In The Business Market.
17. Registration of System:
Registration Of Business Also Depends Upon The Form Of Business Organization And Nature Of Organization. In Sole Proprietorship, There Is No Need Of Registration. In Case Of Partnership, The Registration Is Optional Means Upon The Will Of Partners. But In Case Of Company Registration Is Essential Under the Provisions of Companies Ordinance 1984
18. Business Is A System:
Business Is A Systematic Arrangement Of Various Elements, Which Leads To The Attainment Of Particular Objective, According To A Well-Established Plan. System Means A Set Of Methods Or Procedures To Carry Out A Specific Activity.