The element of risk is present in almost all economic activities but it is more significant in business. Production and/or exchange of goods and services with profit motive – Goods produced/purchased or services generated by business are sold to others for a value called price. Since a business operates is a dynamic environment, risk is inherent is every business. For example, if a person buys fire crackers in bulk for Diwali and sells it at a profit to the neighbours, just one time, will not be called as a business. Social Objectives – Business cannot exist solely to earn profits. Modern businesses make use of scientific techniques for making budgets, recruitment of employees, handling employees and overall control. milk, sugar, T.V. transport, insurance, banking etc.) The goods are manufactured or produced with a view to sell them at a profit to people requiring them, This production of goods by manufacturing, processing, altering or any other similar process is also called creating ‘form utility’. Goods involve consumer goods such as clothes, shoes, etc. (b) Changes in consumer tastes and fashions. Dealings in Goods and Services on a Regular Basis: Business involves dealings in goods or services on a regular and recurring basis. Top 10 Qualities Of A Successful Businessman. (i) Economic Activity Business is considered to be an economic activity because it is undertaken with the aim of earning money or livelihood and not because of any sentimental reason like love, affection or sympathy. Through such regulations, it regulates the working of the business units in national and international markets to restrict unfair and unethical trade practices. Business enterprises are subject to risks and uncertainties. Concerns supplying electricity, water or gas, or those engaged in transportation of goods and passengers, deal in services and are business concerns like those dealing in tangible goods. Share Your Word File Services are intangible in nature. The element of risk exists due to a variety of factors such as – change in the demand of goods, risk of loss due to fire, earthquake, pilferage, theft etc., competition, changes in government policies etc. This makes business a social institution. Profit generally depends not only upon the efforts of the business enterprise, but also upon a number of other factors over which it has little or no control. The businessman also desires to satisfy human wants through conduct of business. In this case, it is called as industrial activity. Business incorporates the entire human efforts directed towards the production or acquisition of wealth through the process of buying and selling of goods and services. Services are intangibles, such as supply of electricity, insurance, banking, etc. If we were to define business in much finer terms, we can say that“Business is any occupation which includes all activities which are connected with production or procurement of goods for sale and adding a profit margin to that costs for further sel… However, the modern businesses operate in a much more competitive and dynamic world. The foremost characteristic of business is the exchange or transfer of goods and service for price or value. For example, a farmer who keeps cows to obtain milk for his family is not running a business. 4. There is greater recognition of social responsibility of business. It is mandatory to procure user consent prior to running these cookies on your website. When goods are exchanged for money’s worth, it is called monetary exchange. 2. Production or purchase of goods and services for personal use or for presenting as gifts to others does not constitute business as no sale or transfer for value is involved. Consumer goods are meant for direct use by the ultimate consumers, e.g., bread, clothes, shoes, etc. A business transaction involves an exchange. They must therefore be either manufac­tured or produced or they must be procured so that they can be sold and supplied. A single transaction involving buying and selling goods may not be considered as business. Exchange – Business involves exchange of goods and services for money or money’s worth. Services consist of those items which are not stored by consumers, such as- transport services. But cooking food and selling it to others for a price, becomes business.

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