The term 'business ‘refers to all the economic activities carried on by people and organizations for generating incomes.

The term 'business ‘refers to all the economic activities carried on by people and organizations for generating incomes. It is concerned with producing and distributing goods and services for earning a profit. It is a regular process of exchanging goods and services which involve risk and uncertainty.

According to James Stephenson, “Economic activities performed for earning profits are termed as the business."

From the above definitions, it is clear that the business is the economic activity of individuals and organizations aimed at earning profit through the production and distribution of goods and services.

Generally, there are two concepts of business:

• Traditional Concept:
  The traditional concept explains that the business of business is to earn profit through production and marketing of products. Products may be different types for example physical goods, services, Ideas, and information etc. The main motto of business is to maximize only profit as per traditional concept.
  
  

  Modern Concept:

  Consumer satisfaction is the central point of the Modern concept of business. Profit can be earned by maintaining social responsibility. It strives to include every aspect of human civilization. It views the modern business as a socio-economic institution which is always responsible towards the society.

The term 'business ‘refers to all the economic activities carried on by people and organizations for generating incomes. It is concerned with producing and distributing goods and services for earning a profit. It is a regular process of exchanging goods and services which involve risk and uncertainty. In fact, business is an economic activity aimed at fulfilling the needs and wants of customers through the supply of goods and services through the supply of goods and services for their satisfaction.

According to L.H Haney, "Business may be defined as a human activity directed towards producing or acquiring wealth through buying and selling of goods."

According to James Stephenson, “Economic activities performed for earning profits are termed as the business."

From the above definitions, it is clear that the business is the economic activity of individuals and organizations aimed at earning profit through the production and distribution of goods and services.

Generally, there are two concepts of business:

• Traditional Concept: The traditional concept explains that the business of business is to earn profit through production and marketing of products. Products may be different types for example physical goods, services, Ideas, and information etc. The main motto of business is to maximize only profit as per traditional concept.
  
  
• Modern Concept: Consumer satisfaction is the central point of the Modern concept of business. Profit can be earned by maintaining social responsibility. It strives to include every aspect of human civilization. It views the modern business as a socio-economic institution which is always responsible towards the society.
  
  
  

  Characteristics of Business

  • Human Activity:
    Business is a human activity, No business can be performed without human efforts. The stakeholders of business such as workers, manager owner’s etc play an important part in the business.
    
    
  • Economic Activity:
    It is an activity which involves in exchange of goods and services for money. It does not include non-economic activities which are not directed to generating income.
    
    
  • Enterprise:
    Business is an enterprise of a person who generates an idea, bears the risk, produces new products or services and sell them to the consumers. The owner or entrepreneur generates the idea of business.
    
    
  • Production and Distribution:
    Business involves in production and distribution of goods and services. The production and distribution of goods and services are carried on to the satisfaction of the customers.
    
    
  • Customer Satisfaction:
    Every business activity is centered on customer service and their satisfaction. No business can exist over a long period of time without satisfying the needs and wants of the customers.
    
    
  • Continuity in Dealing:
    Business must be regular and continuous in its dealings. It must continuously and regularly produce and sell goods and services to customers. One time dealing cannot be termed as a business.
    
    
  • Risk and Uncertainty:
    Every business activity involves risk and uncertainty to some extent. The risk of loss is ever present in every business activity. Hence, there is no certainty that the business activity always results in profit.
    
    
  • Profit Motive:
    Profit is an essence of business. The activities relating to production and distribution of goods and services are carried on with the aim of earning profit.
    
    
  • Finance or Capital:
    Business needs some capital to acquire some production and distribution of goods and services can be produced and marketed thus Capital is said to be the lifeblood of business. No business ever can be started and successfully run without adequate finance.
    
    
  • Ownership and Employment:
    Every business is owned by an individual or a group of individuals. The owner contributes capital to start and run the business. Business may be sole trading, partnership, joint stock or a cooperative. Except sole trading, other forms of business need employees for the day to day activities.

Characteristics of Business

• Human Activity:
  Business is a human activity, No business can be performed without human efforts. The stakeholders of business such as workers, manager owner’s etc play an important part in the business.
  
  
• Economic activity:
  It is an activity which involves in exchange of goods and services for money. It does not include non-economic activities which are not directed to generating income.
  
  
• Enterprise:
  Business is an enterprise of a person who generates an idea, bears the risk, produces new products or services and sell them to the consumers. The owner or entrepreneur generates the idea of business.
  
  
• Production and distribution:
  Business involves in production and distribution of goods and services. The production and distribution of goods and services are carried on to the satisfaction of the customers.
  
  
• Customer Satisfaction:
  Every business activity is centered on customer service and their satisfaction. No business can exist over a long period of time without satisfying the needs and wants of the customers.
  
  
• Continuity in dealing:
  Business must be regular and continuous in its dealings. It must continuously and regularly produce and sell goods and services to customers. One time dealing cannot be termed as a business.
  
  
• Risk and Uncertainty:
  Every business activity involves risk and uncertainty to some extent. The risk of loss is ever present in every business activity. Hence, there is no certainty that the business activity always results in profit.
  
  
• Profit Motive:
  Profit is an essence of business. The activities relating to production and distribution of goods and services are carried on with the aim of earning profit.
  
  
• Finance or capital:
  Business needs some capital to acquire some production and distribution of goods and services can be produced and marketed thus Capital is said to be the lifeblood of business. No business ever can be started and successfully run without adequate finance.
  
  
• Ownership and Employment:
  Every business is owned by an individual or a group of individuals. The owner contributes capital to start and run the business. Business may be sole trading, partnership, joint stock or a cooperative. Except sole trading, other forms of business need employees for the day to day activities.

Differences Between economic and non-economic activities

Characteristics of Business

• Human Activity:
  Business is a human activity, No business can be performed without human efforts. The stakeholders of business such as workers, manager owner’s etc play an important part in the business.
  
  
• Economic activity:
  It is an activity which involves in exchange of goods and services for money. It does not include non-economic activities which are not directed to generating income.
  
  
• Enterprise:
  Business is an enterprise of a person who generates an idea, bears the risk, produces new products or services and sell them to the consumers. The owner or entrepreneur generates the idea of business.
  
  
• Production and distribution:
  Business involves in production and distribution of goods and services. The production and distribution of goods and services are carried on to the satisfaction of the customers.
  
  
• Customer Satisfaction:
  Every business activity is centered on customer service and their satisfaction. No business can exist over a long period of time without satisfying the needs and wants of the customers.
  
  
• Continuity in dealing:
  Business must be regular and continuous in its dealings. It must continuously and regularly produce and sell goods and services to customers. One time dealing cannot be termed as a business.
  
  
• Risk and Uncertainty:
  Every business activity involves risk and uncertainty to some extent. The risk of loss is ever present in every business activity. Hence, there is no certainty that the business activity always results in profit.
  
  
• Profit Motive:
  Profit is an essence of business. The activities relating to production and distribution of goods and services are carried on with the aim of earning profit.
  
  
• Finance or capital:
  Business needs some capital to acquire some production and distribution of goods and services can be produced and marketed thus Capital is said to be the lifeblood of business. No business ever can be started and successfully run without adequate finance.
  
  
• Ownership and Employment:
  Every business is owned by an individual or a group of individuals. The owner contributes capital to start and run the business. Business may be sole trading, partnership, joint stock or a cooperative. Except sole trading, other forms of business need employees for the day to day activities.