Business | Meaning, Concept

Meaning of Business - The word "business" means the steady making and distribution of goods and services with the aim of earning profits under uncertain market conditions. But, it is a cost-effective activity, which is related to continuous and regular production and distribution of goods and services for satisfying human wants. 

A. Business | Meaning, Concept

A business is also known as an enterprise or firm is an organization that is involved in the trade of goods, services, or both to consumers. A business may also be not-for-profit or state-owned. The term "business" has at least 3 usages, depending on the scope, which is as follows:

1. The singular usage to mean a particular organization.
2. The popularized usage to refer to a particular market sector.
3. The broadest meaning, which encompasses all activity, is suppliers of goods and services.

Stephenson defines business as. "The efficient making or purchase and sale of goods undertaken with an objective of earning profit and acquiring wealth through the satisfaction of human wants. But, the word "business" means the steady making and distribution of goods and services with the aim of earning profits under uncertain market conditions.

B. Features/characteristics of Business -

(i) Continuous process - In order to be called a business, the activities must be continuous.
(ii) Gain motive -  The gain is a reward for the services of a businessman.
(iii) Risks and Uncertainties - Business is subject to risks and uncertainties. Some risks such as loss due to fire and theft can be insured.
(iv) Reciprocate of goods and services - All business activities are directly or indirectly concerned with the exchange of goods and services for money or money's worth.
(v) Dealing in numerous transactions
(vi) Possession of managerial skills for economic success
(vii) Buyer and Seller
(viii) Connected with production
(ix) Dealing with goods and services
(x) Marketing and distribution of goods
(xi) Motivator satisfy human wants
(xii) Managing human resources
(xiii) Social obligations

C. Business trade and commerce -

Business is divided into the following two categories are as follows:

1. Industry
2. Commerce

Industry: The word "Industry" has been derived from the Latin word "Industria" which means "delight activity directed to some purpose". The industry is a branch of commercial enterprise, which is concerned with the output of a specified product or service. The industries can be several types namely - Primary, Genetic, Extractive, Manufacturing and service industries, etc.
Commerce: It is again subdivided into trade and aids to trade. They are all closely related to each other. They are inseparable. They are all parts of the whole business system. It is concerned with the sale, transfer or exchange of goods and services. It includes all those activities that are involved in buying, selling, transporting, banking, warehousing of goods and services.
Trade: It includes sale transfer or exchange of goods. It does not include other functions of commerce like transportation, insurance, banking, and warehousing. There would be little need for commerce without trade. Similarly, trade without aids to trade is meaningless.

Business | Meaning, Concept & Nature