Characteristics of Business

All those economic activities are concerned with the production and exchange of goods and services with the aim to earn profit is called business. The persons who are engaged in business activities are generally known as business, let’s take some examples of business: a farmer cultivating a land and selling his crops, a doctor treating a patient, a lawyer prosecuting for his clients, teachers teaching students in school, etc. Businesses create various types of utilities by making goods and services more valuable and useful to consumers. When raw materials are converted into finished products. It creates utility.  But nowadays business not only includes dealing with goods and services and does not run only for earning profit.It also includes the following act:-

• Creating a customer for itself
• Converting economic resources into goods and services.
• Innovating new products and services, technological up-gradation of the production process.
• Marketing of all products and services so that they can reach the customer.

Definition:-

According to the wheeler “Institutions organised and operated to provide goods and services to the society under the incentive of private gain”.

According to W.R. Springal “All the activities included in the production and sale of goods and services may be classified as business activities “.

Objectives of Business

1.  Economic objective 

• Survival:- To survive and exist in the competition for a long period is only possible when a firm can cover its costs and earn profits.
• Profit:- Profit is an important factor for the survival of the company, growth of the company, and expansion of a business.
• Growth:- After starting a business growth is also an important factor. Growth is measured by sales, number of branches, number of products, etc.

2. Social Objectives 

• Supply of desired quality of products – Customers prefer to buy the products only when they are of satisfactory quality and are available at a reasonable price. 
• Avoidance of unfair trade practice – Unfair trade practices include black marketing of products, adulteration in products, exaggerating in advertisements of products, etc. With these practices, a businessman will not only lose his reputation but it is punishable under law.
• Avoidance of pollution – Businessmen must adapt environment-friendly techniques of production and should drain the waste materials in such a way that they do not pollute the environment.

3. Human or personal objectives

These objectives are related to the employees of the organization. It includes-

• Providing good working conditions.
• Payment of competitive usage and salaries.
• Personal growth and development through training.
• Peer recognition and respect by encouraging employees to take initiative and participate in decision-making.   

Characteristics of Business

1. Businesses a human activity – Business is an activity performed by humans in which human beings produce goods and make a profit by selling in the market.
2.  Production and selling of goods and services – Business includes the activity of production and selling of goods and services in the market to earn money and profit. Either produce or procure goods and services from other producers. Deals in consumer goods, industrial goods, or services (banking, insurance, transportation, etc. )
3. Risk and courage – Risk Is always in the business and businesses dare to face the risk.
4. Sales of goods and services for fulfilling human needs – production and sale of goods and services are popular activities. The production of goods and services for self-consumption is not a business. Ex. A farmer grows crops on his farm but if this farmer has done the cultivation of crops for himself, it is not a business but if this farmer sells these crops, it is a business. If we buy goods as a gift, it is not a business but if we buy for sale, it is a business.
5. Dealing with goods and services daily – Buying, selling, and exchanging goods and services once or twice is not a business. Only regular buying or selling of goods or services for economic motives is business. Ex. Selling a house to buy a new house is not business but selling and buying a house regularly to earn is business.
6. Profit earning- Businesses can’t survive without earning profit. Any transaction which is done without the motive of profit can be called a business transaction.
7. Uncertainty or risk involved –  There is always a possibility of a loss of risk in business because the business environment is dynamic, market conditions change, changes in the taste of customers, and strikes in the business factory. So all these can lead to loss and risk in business.  

How to understand a business :-

• A business model is a company’s core strategy for profitably doing business.
• Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses.
• The two levers of a business model are pricing and costs.
• When evaluating a business model as an investor, ask whether the idea makes sense and whatever the numbers add up.

Conclusion

Business is the activity of making money by producing, buying, and selling goods and services. Business is producing goods and distributing goods and services in the market and its auxiliary activities for earning profit. Business is the operation for which a customer pays for the goods and services for his\her satisfaction or needs and creates value in life. 

So, we discussed these points in detail with concept, objective, and some characteristics, some points on how to understand the business of a company with some examples of the business.