Amerinuss 10

Everything that surrounds us is a chain of business, from a laptop to the chair we sit. With every change in technology, human being demand also changes. Giving business persons to grow their business or start a new venture. Let’s study in details about the business and its characteristics.

Business Definition

Business is an economic activity that involves the exchange, purchase, sale or production of goods and services with a motive to earn profits and satisfy the needs of customers. Businesses can be both profit or non-profit organizations that function to gain profits or achieve a social cause respectively.

Quick link: Types of Entrepreneurship

Characteristics of Business

Following are the characteristics or features of business
(1) An Economic Activity	A business is an economic activity which includes the purchase & sale of goods or rendering of services to earn money. It is not concerned with the achievement of social and emotional objectives. Example: Wholesaler sell goods to the retailers and retailers sell goods to the customers.
(2)Manufacturing or Procurement of Services and Goods	Before offering goods to the consumer for consumption it should be manufactured or procured by businesses. Business enterprise converts the raw material into finished goods. Organisations also procure finished goods& services from the producers to meet the needs of the customers in the market. Goods can be a Consumer good like sugar, pen, ghee, etc. capital goods include machinery, furniture, services like transportation, banking, etc. Example: Individual retailer buys the toffees from wholesalers in a specific quantity and sells it to the ultimate consumer.
(3)Exchange or Sale of Goods and Services for the Satisfaction of Human Needs	Every business activity includes an exchange or transfer of services and goods to earn value. Producing goods for the goal of personal consumption is not included in business activity. So, there should be the process of sale or exchange of goods or services exits among the seller and the buyer. Example: A lady who bakes pastries and cakes at home and sells it to the pastry shop is a business activity.
(4) Dealings With Goods and Services on a Daily Basis	Every business, rendering either services or goods should deal on a daily basis. A one-time sale is not considered a business activity. Example: If a person sells his old car through OLX even at a profit will not be considered as a business activity. But if he is engaged in regularly trading of cars at his showroom will be considered as business activity.
(5) Profit Earning	No business can last for long, without making a profit. The purpose to conduct the business is to earn profits and minimise the cost. Example: A business house tries to reduce the cost of production and the cost of raw material to earn high profits.
(6) Uncertainty of Return	The possibility of earning profit or loss is very uncertain and can’t be anticipated by the entrepreneur. Hence, no business can totally do away with risks.

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			the nature of the job.
(3) Qualification	Minimum qualification is not necessary.	Proficiency and training in a specific field are necessary.	Requirement and training as recommended by the employer.
(4) Reward or Return	Profit earned.	Professional fee.	Wages or salary.
(5) Capital Investment	Capital is needed according to the size and nature of business.	Limited capital is needed.	No capital is required.
(6) Risk	Profits are uncertain that is why risk is present.	The fee is generally regular and certain that is why minimum risk.	Fixed and regular pay that is why no risk.
(7) Transfer of Interest	Possible with some rules.	Not feasible.	Not feasible.
(8) Ethical Code of Conduct	No code of conduct is prescribed.	Professional code of conduct is to be comprehended.	There is a contract instead of a code of conduct.

Do you know? The difference between Marketing vs Branding

Multiple Choice Question

Q.1- Identify the characteristics of the business :

a. Profit earning

b. Uncertainty of return

c. Both (a) & (b)

d. None of the above

Q.2-____________ is excess of revenue over cost.

a. losses

b. profit

c. Both (a) & (b)

d. None of the above

Q.3- The reward a businessman receives in return of his risk-taking in the business is _____

a. expenses

b. profit

c. Both (a) & (b)

d. None of the above

ANSWER KEY

1-c, 2-b, 3-b

Important Topics in Business Studies:

For more data on Business Studies Class 11 Syllabus, Commerce notifications and sample papers for Class 11 Commerce, stay tuned to BYJU’S

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Comments

Bhoomi bhardwaj

September 29, 2020 at 2:09 pm

Nice, The most impressive part is the question and answer which is different from other websites. I really appreciate your efforts keep it up and thanks