Explain the characteristics of business

• A business is an economic activity which includes the purchase & sale of goods or rendering of services to earn the money.
• It is not concerned with the achievement of social and emotional objectives.
• Example:

Wholesaler sell goods to the retailers and retailers sell goods to the customers.

• Before offering goods to the consumer for consumption it should be manufactured or procured by businesses.
• Business enterprise converts the raw material into finished goods
• Organizations also procure finished goods& services from the producers to meet the needs of the customers in the market.
• Goods can be a Consumer good like sugar, pen, ghee, etc. capital goods include machinery, furniture, services like transportation, banking, etc.
• Example:

Individual retailer buys the toffees from wholesalers in a specific quantity and sells it to the ultimate consumer.

Services for the Satisfaction of Human Needs

• Every business activity includes an exchange or transfer of services and goods to earn value.
• Producing goods for the goal of personal consumption is not included in business activity.
• So, there should be the process of sale or exchange of goods or services exits among the seller and the buyer.
• Example:

A lady who bakes pastries and cakes at home and sells it to the pastry shop is a business activity.

• Every business, rendering either services or goods should deal on a daily basis.
• A one-time sale is not considered a business activity.
• Example:

If a person sells his old car through OLX even at a profit will not be considered as a business activity. But if he is engaged in regularly trading of cars at his showroom will be considered as business activity.

• No business can last for long, without making a profit.
• The purpose to conduct the business is to earn profits and minimize the cost.
• Example:

A business house tries to reduce the cost of production and the cost of raw material to earn high profits.