Business is concerned with commercial activities on regular basis with the aim to earn a profit.
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What is a Business?
It is an activity that deals with the buying and selling of goods and services for mutual gain. It is an integral part of economic activities which are directly concerned with money. For example, shopkeepers/retailers purchase grocery items from wholesalers and sell them to customers.
“Business is an activity directed towards producing or acquiring wealth through buying and selling goods.”
-By Lewis H. Honey
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Nature/purpose of Business:
There are a number of points related to nature or purpose which are as follows: –
The main aim of every company is to earn a profit. Doing any activity related to charity or social service will not be considered as a profit motive, if any organization will do these services, then these will be covered under social objectives which are very different from earning profit.
2.Regularity in transactions:
One-time transaction does not mean profession, regular occurrence of transactions is very important for it.
Example: If I sold old jewelry to buy new jewelry for one time only, then this is not a business transaction but if I will do this type of transaction on regular basis to earn money then it will be known as business. So regularity is a must for it.
3. Sale or exchange:
The production of goods for own use is not a business. For example, manufacturing toys for their own kids is not business but if toys are manufactured for sale, then it will be considered as business.
Let’s take another example: buying a diamond ring for a spouse is not an example of businesses but buying diamond rings for reselling is an example of businesses. So there must be a sale or exchange of goods or services.
Uncertainty related to any mishappening is called a risk. Every enterprise faces up and downs so it does not mean that every time a business will get profits all the time. In the future market conditions may change which includes customer preferences, a market trend related to any product, all these may lead to any loss.
5. Quality Product:
Organizations must be a focus on the quality of the product so that customers will retain it for a long period of time. Offering quality gives the best results in the form of goodwill, high sale turnover.
The quality standards should be maintained by the business for achieving success. For example Mc Donald, Dominos. These are mainly focused on good quality products with a unique set of standards, that’s why these are famous in the world.
6. Consumer satisfaction:
Consumers are satisfied only when they get the best quality and actual value for their purchase. One of the main purposes of the organization is to create and make customers delight from the operations.
Adequate funds are necessary to run any business whether it is small or large. For example, if we want to sell something, firstly we have to buy that thing by spending money nobody will give us free of cost.
Every business has some other responsibilities which are different from actual business operations these are some welfare activities which are performed by the business without any monetary benefit/profit like environment protection by using eco-friendly techniques, employment generation, free education facilities to the lower class society, etc.
Objectives of Business:
Objectives are the goals to guide the efforts. These are the main steps to follow the pathway for achieving the vision of the business and are divided into three major categories:
Economic objectives tell us about business survival, its growth, and profitability index. Businesses have to make themselves financially sound so that any kind of risk can be taken in the near future.
In order to achieve this primary objective, other objectives are needed to be
pursued by business:
a) Creation of customers
A business unit cannot survive if there are no customers to purchase the products and services. A businessman can earn profits only if he provides quality goods and services at a reasonable price. Now there is a need to attract more customers.
This can only be achieved with the help of marketing activities.
Innovation means something different or new, which brings about improvement in products, For Example, production, and the distribution of goods.
Society provides many things like raw material, human resources, natural resources for smooth running for the business, then this the responsibility of the business to take care of society and fulfill the requirements of society.
So business has to play an important role related to social objectives. For example, the generation of employment provides quality products at fair prices.
Individual or human objectives are related to all workmen working in the organization/business. So for taking care of all employees are some objectives which have to fulfill by the business.
For example good working conditions, good salary packages, growth, rewards and recognition, housing facility, medical facility, education, training, etc.
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