Business is the activity performed by an individual or a group of people to earn profit within the govt. rules and regulations. Some important features are given below
Profit: The activities of a business are run to earn a profit or make money. People start a business to earn money, although there is a possibility of loss at least in the initial stages. The main objective behind running a business is profit maximization or value maximization.
Risk: Risk is associated with business operation, although from one kind to another. As risk is an inherent element, it is possible that gain-loss can arise.
Economic Activities: A Business includes only economic activities. All those activities relating to the production and distribution of goods and services are called economic events. These activities are undertaken with a commercial motive. Business is carried on with a profit motive. Any action undertaken without financial consideration will not be a part of the business. So, the business covers only economic activities.
Legality: The subject matter of business is to be valid or legal. A business should operate through govt. Rules and regulations of a country. Illegal activities are not considered as business.
Creation Of Utilities: Business creates service and thus satisfies human wants by modification of product features, size, style, design, etc.
Entrepreneur: There must be someone to take the initiative for establishing a business. The person who recognizes the need for a product or service is known as an entrepreneur. The entrepreneur is a crucial figure in the process of economic growth.
Organization: Every enterprise needs an organization for its successful work. Various business activities are divided into departments, sections framework for managerial performance and jobs. An organization creates a framework for managing operations. A proper organization is and helps in coordinating various business activities helpful in the smooth running of the business and helps to achieve its objectives.
Exchange of goods and service: Exchange of goods and necessary features of the business. Without the exchange of products and services, we can not think about the existence of the business a company, or even a market.
Forecasting: For the growth and survival of a business, a businessman needs to forecast. Some of the subjects that a businessperson must have to predict are:
1. Demand and supply of the product or services.
2. Potential customers of the product.
3. Observation of the competitor’s activities.
4. Forecasting technological changes.
5. Forecasting economic and political changes etc.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.