briefly explain any five characteristics of business
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Characteristics of Business – 10 Characteristics: Dealings in Goods and Services, Profit Motive, Risk, Creation of Utilities, Economic Activity, Social Institution and a Few Others. ... Business refers to a set of organised activities for production and exchange of goods and services with an objective to earn profit.
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answered Apr 2, 2018 by aditya23 (-2,145 points)
Characteristics of Business
(i) Economic Activity Business is considered to be an economic activity because it is undertaken with as aim of earning money or livelihood.
(ii) Production or Procurement of Goods and Services Goods are offered to consumers after they are either produced or procured by business enterprises. Thus, every business enterprise either manufactures the goods it deals in or it acquires them from other producers, to be further sold to consumers or users. Goods may be consumer goods like television, tea, pen, etc or capital goods like machinery, furniture, etc. Services may include facilities offered to consumers in the form of transportation, banking, electricity, etc.
(iii) Sale or Exchange of Goods and Services Business involves transfer or exchange of goods and services for value addition. If goods are produced for self consumption and not for selling purpose, it cannot be called a business activity. Cooking food at home for the family is not business, but cooking food and selling it to others in a restaurant is business. Thus, one essential characteristic of business is that there should be sale or exchange of goods or services between the seller and the buyer.
(iv) Regular Dealings in Goods and Services Business involves dealings in goods or services on a regular basis. Therefore, one single transaction of sale or purchase does not constitute business.
(v) Profit Earning The primary objective of business is to earn profit. For this businessmen make all possible efforts by increasing the volume of sales or reducing cost. It is an essential factor as growth and expansion would be possible only when a business is making profit.