Prepared By
PRASANTH.S.R

Concept of business
Business means busyness or the state of
being busy . Business includes all occupations in
which people regularly engage in activities with a
view to earning profit. Such activities may consist
of production or purchase of goods for sale , or
exchange of goods or providing services to satisfy
the needs of others

Human Activities
In every society , people undertake
various activities to satisfy their wants.
These activities may broadly be classified in
to two;
Economic activities
Non - economic activities

Economic activities
Activities undertaken with the object
of earning money or livelihood are known
as economic activities . for example ; a
teacher goes to school, a manager to his
office, a doctor to his clinic , a worker to
the factory and a lawyer to the court, etc.

Non-economic Activities
Activities which are undertaken to derive
psychological satisfaction or for religious or social
obligations, or are performed out of love, sympathy,
patriotism and similar sentiments are called non
economic activities. A house wife cooking for the
family, a man visits to the temple for the day’s
prayers are all examples of non-economic activities.
The purpose of such activities is not to earn money
. It gives the happiness, pleasure or satisfaction ,
which cannot be expressed in terms of money

Characteristics of business activities
An Economic Activity
Production or Procurement of Goods &
services
Sale or exchange of goods & services
Dealing in goods & services on a
Regular basis
Profit Earning
Uncertainty of Returns

An Economic Activity
Business is considered to be an
economic activity since it is concerned with
the production and distribution of goods and
service. And carried on regularly with the
object of earning profit.

Production Or Procurement Of
Goods And Services
Before goods are offered to people for
consumption, these must be either produced or procured
from various sources. Thus, every business enterprise
either produce on its or assembles them from producers
to be sold to consumers. Goods may be consumer
goods (items of daily use like pen , pencil ,soap, sugar ).
Services denotes facilities offered to consumers.eg;
transportation, insurance, banking ,electricity etc..

Sales Or Exchange Of
Goods And Service
Sales or exchange of goods and service is for
the satisfaction of human needs. All business
activities involves production, purchase, sale and
transfer of goods and service And essential
characteristics of business is that there should be
sale or exchange of goods and services between
buyer and seller.

Dealing in goods and services
On a Regular Basis
Business consists of dealing in goods and service
on a regular basis. Goods produced or purchased for
business purpose may be consumers goods like cloth
,shoe ,food stuffs etc.., or capital goods like tools and
machinery. Consumer goods are used directly for
consumption. Capital goods assist in the production of
consumer goods. Services are those facility offered to
customers in the form of transportation, supply of
electricity, water etc...

Profit motive
One of the main purpose of business is
to earn income by way of profit . It must earn
profit for its survival, growth, expansion,
research and development and for its own
prestige . Profits must be earn through legal
and fair ways.

Uncertainty of Returns
It is through risk - taking that a businessman
earns profits. Risk means the possibility of a loss.
Business decision are based on several assumption
which may not come true. Profits of a business
depend not only upon the efforts of the business
concerned but also upon a large number of uncertain
and uncontrollable factors like,
• change in technology
• change in consumers taste and
fashions
• increase in the degree of competition
• labour problems
• shortage of raw materials
• fire, theft, natural calamities and
accidents