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 instead of 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 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 regulation 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 working. Various business activities are divided into departments, sections framework for managerial performance and jobs. An organization creates a framework for manages operations. A proper organization is and helps in coordinating various business activity helpful in the smooth running of the business and helps to achieve its objectives.
Exchange of goods and service: Exchange of goods and necessary feature of the business. Without the exchange of products and services, we can not think about the existence of the business or a company or even a market.
Forecasting: For growth and survival of a business, a businessman needs to forecast. Some of the subject that a businessperson must have to predict are:
- Demand and supply of the product or services.
- Potential customers of the product.
- Observation of the competitor’s activities.
- Forecasting technological changes.
- Forecasting economic and political changes etc.