CBSE Class 11 Business Administration Introduction to Business Notes

Introduction to Business

1.1 Concept, Nature and Type of Business

♣ Introduction:

All Human beings where ever they may be require different type of goods and services to satisfy their needs. Business is a major economic activity in all modern societies concerned with production and sale of goods and services required by the people. It is aimed at earning money by satisfying human demands.

♣ Meaning:

Literal meaning of Business is “BUSY”.

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Business is defined as an economic activity

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involved in the production and sales of goods and services

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undertaken with the motive of earning profit

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by satisfying human needs in the society.

♣  Characteristics of Business activities:

• An Economic activity: It means an activity aimed at earning money. Business is also aimed at earning money or livelihood by satisfying human needs.

• Production and procurement of goods and services: Every business enterprise must either manufacture the goods or it acquires from producers. Goods may be consumer goods or Capital goods. Services means facility offered to consumers like banking, insurance etc.

• Sale or exchange of goods and services: Business involves transfer or exchange of goods and service for value.

• Dealing in goods and services on a regular basis: It should be a regular activity. One time sale or exchange will not be considered as business.

• Profit earning: Business always aims at earning profit.

• Uncertainty of earning: There is always a possibility of less amount of profit or even loss in business.

• Element of Risk: There is always a possibility of Uncertainty of earnings

♣ Comparison of Business, Profession and Employment:

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