B.Com Part 1 Intro to Business Question No. 2 (B) Explain The Importance Of Business?

(Last Updated On: February 20, 2018)

 

Question No. 2 (B) Explain The Importance Of Business?

The Importance of Business

The-Importance-of-business

Introduction:

The Importance Of Business Is That Provides Products Or Services To Customers. These Products Or Services In The Present Day World Are Provided By Entrepreneurs Who Organize, Manage And Assume The Risk Of Starting Businesses Mainly For Earning Profit. Business Makes The Possible Use Of Scarce Resources Such As Men, Machines And Materials For The Production Of Goods. The Importance Of Business Can Be Judge From The Following Activities Undertaken By The Business.

Business:

  1. Business Includes All The Commercial And Industrial Activities That Provide Goods And Services To The People With An Objective To Earn Profit.(R.N. Owen)
  2. Business Means Human Activity Directed Towards Producing Or Acquiring Wealth Through Buying And Selling Of Goods.(L.H.Haney)
  3. Business Is A Legal Activity That Satisfy The Human Need And Wants By Providing Goods And Services For Private Profit.(Prof. Bittel)

1. Variety Of Products:

Due To Business, There Are Varieties Of Products In Market. Necessities Of Life Food, Cloth And Shelter Etc. And Luxuries Of Life Mobile Phone, Vehicle And Computer Etc. Are Provided To The Society Bu The Business. Business Provides Choice To The Consume For The Purchase Of Foods As Per Taste And Purchasing Power.

2. Source Of Employment:

Business Provides Employment To Skilled And Unskilled Workers, The Companies Can Provide Jobs To Millions Of People In Every Field. It Is Beneficial For The People Who Are Willing To Work For Their Family. Business Provides Direct Employment To Its Owner Or Owners But Indirectly To Number Of People.

3. Nation Income:

Business Of Today Is Providing Revenue To The State With Which The Government Maintains Law And Order, Under Takes Defense And Carries Welfare And Development Activities. Buy This Investment Opportunities Increased In The Country Which Increase Business Activities And Thus There Is Increase In Nation Income Or Country Income.

4. Better Living Standard:

Due To Business, The Availability Of Cheap And High Quality Goods Improves The Standard Of Living, Promotes Savings And Increase The Income Of The People. In The Absence Of Business Flow Of Income Stops And Living Standard Goes Down.

5. Provision Of Credit:

In The Modern World, The Commercial Banks And Other Specialized Credit Institutions Are Providing Credit To The Agriculturists, Traders And Manufactures For Producing Goods And Doing Business Or Large Scale.

6. Insurance Facilities/ Risk Coverage:

The Various Types Of Business Risks Which May Happen Due To Fire, Theft, Flood, Earthquake, Strikes Etc. Can Be Insured And The Loss If Any Arising Out Of The Risks Can Be Recovered. Insurance Has Given Stability To The Business Now Which In The Earlier Days Was Not Avail Able.

7. Transfer Of Goods:

The Fast Developed Means Of Communication And Transportation In These Days Are Helping The Traders In Providing Goods To The Customers At The Right Time, Right Place And Right Price. These Aids To Trade Have Helped In The Expansion Of Business.

8. Investment Facilities:

Business Are Going To Provide Investment Facilities To General Public. The Idle Money Can Be Invested In Business To Earn Profit. So Banks And Other Financial Institution Are Helping To Do This. These Facilities Help To Use Available Resources Such Water, Electricity, Oil Coal, Gas Wood, Iron And Silver Etc. At Optimum Level For The Benefit Of The Country.

The Modes Of Investment May Be:

  1. Owner’s Own Investment (Owner’s Equity)
  2. Investment By Purchasing Shares And Debentures
  3. Investment In Form Of Partnership, Musharika, Modarbah Etc.

9. Foreign Exchange Earnings:

With The Help Of Export Business Can Earn Foreign Exchange. Due To Export Business A Businessman Car Earn Much Amount Of Foreign Exchange From Foreign Countries And By This Activity The Foreign Exchange Reserves Of The Country Increase. Such Foreign Exchange Can Be Used For Import Of Capital Goods, Like Modern Technology.

10. Urbanization:

A Business Is Expanding, It Is Urbanization. The Growth Of Cities Has Changes The Social Life Of Man., His Vision Has Be Broadened. As Many Business Units Are Established In The Cities And By This, Jobless Persons Of Villages Move Towards Cities For Jobs, The Availability Of Modern Facilities Such As School, Hospital, Electricity, Oil, Gas, Water Supply Of Good And Many Other Facilities Attract People To Live In The Cities And As A Result There Is Urbanization Which Leads To Economic Development.

11. Expansion Of Market:

In The Modern World, Goods Are Produced By Business According To The Needs And Expectations Of The Customers. The Customers Want Goods And Services Of Requisite Quality, At Reasonable Price And At Right Time. Markets, Therefore, Have Expanded Consumption Of Goods Due To Increase In Number Of Customers All Over The World.

12. Innovation:

The Business Of Today Is All The Time Busy In Making Improvements By Introducing New Products, For Example, Credit Cards, Digital Diary, Mobile Phones And Modern Ways Of Production Of Goods And Services Etc. For This Purpose Many Businesses Have Established Research And Development Departments Where Research Is Made.

13. Government Revenue:

The Business Sector Is The Main Source Of Income For The Government. A Business Contributes A Large Fund To The Government To Discharge Its Political Liabilities. It Means A Business Provides Income Or Revenue To The Government In Form Of Income Tax, Sales Tax, Excise Duty, And Custom Duty Etc. To Utilize For The Development Of A Country.

14 Foreign Relations:

With The Help Of Business, Like International Trade, Friendly Relationship Can Be Develop To Promote The Peace In The World. Business Of Import And Export Develops Foreign Relations Which Are Very Necessary For The Development Of A Country. These Relations Enhance Social, Scientifics, Cultural And Educational Activities Among The Countries.

15. Consumption Trend:

Business Is Going To Change The Mind Of The Customers With The Passage Of Time. The Products Which We Are Using Now Are Quite Different From Those Of Thirty Years Backs. Thus Business Develops Consumption Trends In The Economy.

16. Survival Of Country:

The Business Is Considered As A Backbone Of Any Country. If The Volume Of A Business Declines In A Country Then It Results In Unemployment, Low Living Standard, Lack Of Funds For The Government And At The End Turns Into Poor Economy. So, The Business Is Very Much Necessary For The Survival Of A Country.

17. Development Of Country:

As We Know Business Reduces Unemployment In The Country, Provides Better Living Standard, Satisfies Human Needs And Wants And Utilizes The Resources Of A Country Efficiently And Effectively Etc. It Is Correct To Say That A Country Develops Or Progresses Due To The Business.

18. Goodwill Of Country:

If There Is More Foreign Exchange Reserves, Low Level Of Unemployment, High Income Of Government, And More Trade Activities Etc. In The Country Due To The Business Then It Can Be Said That The Business Plays A Vital Role In Increasing The Good Will Of A Country In The World.

19. Progress Of Fields:

The Production Of Goods At Large Scale Also Helps In The Development Of Other Fields Like Warehousing, Transportation, Communication, Banking, Insurance And Marketing Etc. Business Supports These Fields In The Vital Way.

 

 

 

hamzaig

Hi! I am the CEO of www.lahoreeducation.com and i am living in Pakistan(Lahore) and i am teacher of commerce i teach about money, banking, finance, intro of business, economics, accounting and some other subjects of commerce and i write notes of that subjects.

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