Concept of Business .11 Features of business(Top most important)

Concept of business/Meaning /Definition/Features of business

Human needs and wants are unlimited. but the human race doesn’t have the necessary skills and resources to fulfill those needs and wants all by themselves. 

Which makes the business activity a must to survive in the modern world.

In this section of the article, we will get to know the modern concept/meaning of business.

Business tend to fulfill all the needs and wants of people either by manufacturing products, services by themselves or by reselling products or services bought from other producers.

Figure 1 let us reveal the concept of business

The word “Business” derived from the word “Busy”, which means “to being busy in something”.  But in the context of business activity, this meaning is incomplete contrary to the scope of business activity.

Anyone can get engage in playing, singing, social gathering but this cannot be regarded as “business” (economic activity). Even an economic activity aimed at earning a profit can not be regarded as a “business” if it is not legal in the eyes of the law. 

For example, selling drugs, smuggling even if it is done with the aim of making a profit.

So, at last, we can say that whenever people engage in the production, distribution or any other related economic activity to fulfill the needs and wants of the with the aim of making a profit than he or she is said to have engaged in business activity.

Activities mentioned below regarded as a business activity whenever conducted with the aim of earning a profit.

ü  production of goods and services.

ü  Reselling and distribution of goods to final consumers.

ü  Related services such as banking, warehousing, insurance, transportation and marketing.

Definition  of business

In general sense business is buying goods and services at cheaper price and reselling them to final consumers with a profit margin.

But in reality, a business doesn’t restrict the buying and selling of goods or services only.  The scope of business is much broader.

Any legal economic activity necessary to produce goods for commercial purpose and distributing them to final consumers comes within the scope of business.

So, the extraction of raw materials, conversion of raw materials to final products and activities related to distribution of these final products to final consumers all falls under business.

Figure 2 Definition of business

Some prominent definition of business is written below:

According to Stephenson business “Is the regular production or purchase and sale of goods undertaken with an objective of earning profit and acquiring wealth through the satisfaction of human wants."

According to brown and Petrello “Business is an institution which produces goods and services demanded by people”. It means business is an institution that produces goods and services needed by society. If the demand is increased, the producer also will increase production

According to Dicksee “Business refers to a form of activity conducted with an objective of earning profits for the benefit of those on whose behalf the activity is conducted." 

According to Lewis Henry business   " is a Human activity directed towards producing or acquiring wealth through buying and selling of goods."

 

Essential Features/characteristics of business

Figure 3 We are writing the Features of business

As an important part of social science, business tends to engage in the production and distribution of goods to fulfill human needs and wants with the scarce resources left at our disposals. There is some essential distinctive feature/nature of the business which made this profession different from other jobs. Some of the features of the business are discussed below.

1. Profit expectancy: the main feature of a business is that it is conducted to earn a profit as a reward for taking the risk of investing capital and resources to produce goods and services for reselling. 

  Anyone who produces or buys goods for own consumption will not be regarded as engaged in business activity.

2. Risk of uncertainty: is an integral part of the business. Businesses take risks to earn a profit so “profit” is regarded as the” reward of taking the risk “.. there can be a fall in price of products in the market. 

   Loss can also be incurred by natural disasters like tsunami or earthquake etc. businesses tend to survive in the market accepting all these risk factors as these risk and uncertainty are an integral feature of the business.

3. Recurring transactions: to be regarded as a business the owner must conduct several deals within a period, not just one and two. 

   Anyone who buys, say a refrigerator for own use but then sell it off due to non-convenience later, will not be regarded as conducted a business transaction.

Figure 4 Master Business skills to succeed

4. Legal validity: to be regarded as a business, the organization must produce or sell goods and services that are legal and provides benefits to society. Any establishment which sells illegal products such as drugs for profit will not be regarded as a business at all.

5. Exchange of goods and services: All businesses involve the exchange of goods and services with monetary value.

6. Business skills: to survive and develop in the market, the owner of the business must have the necessary skills and preferably experience to run a business. A potential entrepreneur must conduct research on necessary business skills before jumping into the business.

Figure 5 I am learning Business skills

7. Buyers and sellers: to be regarded as a valid business transaction there must be at least two parties who are willing to exchange the ownership of goods or service in return for a determined money value.

8. Flexibility: a business must be flexible enough to react quickly to its internal and external environment. For example, consumer taste changes constantly, if a business fails to update its product range accordingly, it will go out of the business soon.

9. Freedom:  a business person is not obliged to anyone.  This is one of the most important features of business Which persuades many people to indulge in business.

10. Customer satisfaction: this day’s modern businesses aims to earn profit by providing ultimate satisfaction to consumers. They tend to satisfy consumers by providing quality products at reasonable prices. 
  
  They run their business just not only to earn profit but also to develop new customers and maintain existing ones by excellent service quality, updated technology and new innovation.

11. Social obligation: modern businesses tend to reflect a positive impact on society by its corporate social responsibility activities. They tend to be service-oriented rather than profit-oriented.

Written by: Dony.

Blogger and Academic writer