The word ‘Business’ is defined as an organised and planned activity, wherein the transfer of goods and services occurs for sufficient compensation. It is known as a method to earn money from monetary transactions. The main aim of a business is to make the desired goods and commodities in the market feasible in a productive way. It is a systematic process for a company or a person to manufacture goods and services and sell them in the market to earn an income as profit. Profit plays a significant role in the business as all entities commence their business to gain profit for their product and their efforts. Money is the only factor that keeps a company viable in the market.
Characteristics of Business
Business is always acknowledged, as an economic activity as the primary objective to initiate a trade is earning profit.
Production of Goods and Services
All the commodities and services are manufactured or procured by enterprise entities, to add worth to a company and its customers. Most people and companies add an additional amount to the buying price of the commodity obtained by the supplier to earn a profit.
Trading of Goods and Services
The business includes the transferral of goods and commodities for a monetary value, through trading, but if the goods are procured for personal use, then that trade will not be included as business activity.
If a business needs to survive in the market, they require regular transactions. But if the exchange takes place in seclusion, it is not considered as business. So, to make a business profitable and successful, the trades must be carried out consistently and exhibited.
The primary objective of a business is to make a profit from its actions. It is the backbone of the business that keeps the business working, in the long run.
Risk is the key component of every business, regarded as the loss of a company. Every business attempts to forecast future changes and events and plan accordingly. However, the factors that influence a business are unpredictable and so are the trade opportunities, that can be affected by a change in demand, market crisis, inflation and strikes.
In a business, the results are never anticipated and confirmed, as the amount of capital that the business is going to earn in a deal or trade is not guaranteed. It may be possible that the business earns a profit or incurs losses.
It does not matter the nature of the market of business the company is involved in, it should be registered as a legal entity in the eyes of the government, or else they are not authorised to execute business.
The business strives to supply goods and services to consumers, to fulfil their wants. But if the product is not suitable to satisfy their needs, they are going to move to substitutes. Customers are considered as ‘The King of the Market’. So, all companies aim to satisfy their needs with their products or services. But, to work in a market, a company should manufacture quality products at an affordable price from its competitors.