Explain the characteristics of business

Explain the characteristics of business
  • 1 answers

Yogita Ingle 4 weeks, 1 day ago

Following are the characteristics or features of business
(1) An Economic Activity
  • 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.

(2)Manufacturing or Procurement of Services and Goods
  • 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.

(3)Exchange or Sale of Goods and

 

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.

(4) Dealings With Goods and Services on a Daily Basis
  • 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.

(5) Profit Earning
  • 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.

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