What is Business?

Human beings are continuously engaged in various activities to satisfy their unlimited wants. We often come across the word ‘business’ or ‘businessman’. All of us need food, clothing, and shelter. We also have many other household requirements to be satisfied in our daily lives. We met these requirements from the shopkeeper. The shopkeeper gets from wholesaler. The wholesaler gets from manufacturers. The shopkeeper, the wholesaler, the manufacturer are doing business and therefore they are called as Businessman.

Business is the commercial activity which involves producing or buying and selling products (such as goods and services) with the primary motive of earning profits.      For Example – Any activity that makes profit is a “Business”. It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to General Motors.

A STERET PEDDLER

A BIG COMPANY

Objective Of The Business

The business has become an essential part of the modern world but it can only exists when conduct its activities in a long run. The business objective is what makes the business go on.] While most of the people argue that profit making is the core objective of every business. Few have come up with the new objective.

  • Business exists only to earn profits by providing the goods and services to the customers, according to the traditional concept.
  • The objective of every business is customer satisfaction as this is what results in most profits. If the customer is satisfied, business excels itself, according to the modern concept.

Business can be classified as follows:-

  1. Service
    A service type of business deals in selling intangible products(products with no physical form) to the consumers. Unlike tangible goods, services cannot be stored or separated from the provider. Service firms offer professional services, expertise, commission-based promotions, etc.
    Examples of service businesses include salons, schools, repair shops, banks, accounting firms, and law firms etc.
  2. Merchandising Business
    Merchandising is a middlemen business strategy where the business buys products at wholesale price from a manufacturer, wholesaler, or other partners and sells the same at retail price. They are known as “buy and sell” businesses. They make profit by selling the products at prices higher than their purchase costs. A merchandising business sells a product without changing its form. Examples are: grocery stores, convenience stores, distributors, supermarkets and other resellers.
  3. Manufacturing Business
    Unlike a merchandising business, a manufacturing business buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased. and then sell it either directly to the customer or the middlemen to conduct sales.
    A manufacturing business combines raw materials, labor, and overhead costs in its production process. The manufactured goods will then be sold to customers. Examples of manufacturing businesses are steel factories, plastic factories, etc.
  4. Hybrid Business
    Hybrid businesses are companies that may be classified in more than one type of business. They have the characteristics of two or more types of businesses explained above. For example, a restaurant develops its own dishes by combining ingredients (manufacturing), sells the products like cold drinks, wines, beers etc which are manufactured by other businesses (merchandising), and provide service to the customers (service).

3 thoughts on “What is Business?

  1. Hello. This post was extremely fascinating, especially because I was browsing for thoughts on this matter last Thursday. Dulciana Winslow Madel

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