Characteristics/Features of Business
The following are the main characteristics of business Deals in Goods and Services: 1. Characteristics/Features of Business
1. deals in goods and services.
The goods include both consumer goods like clothes, shoes, sugar, and industrial goods like raw material, tools and machinery The services reter to intangible items having money value. The services of banks, insurance companies, transporting companies, doctors and advocate are good example of services business
2. Economic Activities:
Business includes only economic activities. Economic activities mean exchange of goods and services with the purpose of earning money. It is, therefore, essential to see that any activity performed by an individual should be economic in nature in order to be called business. If any activity undertaken without economic consideration (price) will not be a part of business
3. Regular Transactions:
In reality business is that economic activity, which is done regularly, ie purchase & sale should be regularly done. But if the activity is not regular, it does not come under business. For example, if a person sells his personal laptop and makes a profit, his act is not treated as business. But if he regularly purchases and sells laptops, then it is a business Business consists of producing or purchasing and selling or exchanging goods and services on continuous and regular basis, single transaction is carunot be treated as business
4. Profit Motive:
The main aim of the business is to earn profit. Profits, however, must be earned through legal and fair means. Profit is very important for existence and development of the business. If an organization does not have the aim of earning profit, it would not be a business
5. Size of activity:
Business may be started at small or large scale. It may be at (country level or international level). It may be in the shape of retail shop or at whole sale basis. There is no condition for the size of business activity.
6. Element Risk:
There is an element of risk and certainty in every business The possibility of incurring loss is termed as risk. There is no certainty that business will always result into profit. The business may suffel losses due to change in customer taste. government policies, technology, and fashion etc. So the risk is the essential element of business activity.
7. Source of Employment:
A business is expected to provide the means of livelihood to the members of society Thus, business is not only a good source of self-employment for its owners but also offers variety of jobs to other people like bunkers, agents, transporters.
8. Consumer Satisfaction:
The main aim of business should be earning profit but is essential at the same time that the consumer’s satisfaction is equally important. It is useless to think of profit without consumer’s satisfaction. Even the expansion of business also depends on it. So the satisfaction of human desires is another feature of the business
9. Liability of owners:
The liability of the owners of the business depends upon the size of the organization. If it is sole proprietorship or partnership, the liability of the owners is unlimited but if it is joint stock company, the liability is limited.
10. Capital:
Capital is the investment made in any industry or business. It is the foundation of any business organization Proprietor has to provide investment himself or he has to borrow from his friends or from financial institutions in order to meet the financial needs of the business.
11. Management:
Management is the backbone of a business. All business working is planned and controlled by management. The manger can control the work to achieve business
objectives.
12. Innovation:
Innovation means to introduce something new and different. In these days of competition, a business can be successful only when it creates new and unique products.
13. Registration of Business:
The registration of the business is also depends upon the form of business organization, the nature and size of business. If it is sole proprietorship, there is no need of registration In case of partnership firm, registration is optional and in case of joint stock company it is compulsory
14. Element of Competition:
Competition is found in all the types of business But competition level may be
different depending upon the size and nature of the business transaction So, healthy
competition is very essential for good quality at reasonable prices.
15. Culture followed:
Culture is the set of values, attitudes, beliefs, behaviours and customs that distinguish a society. The culture and civilization cannot be ignored during the process of production of goods and services, because a consumer always considers his cultural and social values in business dealings. The goods and services should meet the cultural needs of the people. The business cannot overlook culture of consumers
16. Creation of Utility:
An important characteristic of business is the creation of utilities in goods in order to make the goods according to the requirement of the customers. From economic point of view utility is created by various ways, like utility of place, form, time and ownership Utility of place is created by carrying goods from the place of production to the place of consumption, utility of form is created by changing their size or form, utility of time is created by storing them in godowns and utility of ownership is created by their purchase and sale
17 .Business is a system:
Business is a systematic arrangement of various elements, which leads to the attainment of particular objective, according to a well-established plan System means a set of methods or procedures to carry out a specific activity.
Conclusion:
In view of the characteristics of business discussed above, Dfaho business may be explained as an economic activity which includes a regular exchange or transfer of goods or services with the object of earning profits and acquiring wealth through the satisfaction of human wants.
