Rising heights Ltd. wants to expand and grow.for this it needs funds to acquire land,building machinery,etc.Also since these assets costs a lot they want the risk associated with them to be reduced.Identify the hindrances and explain how they can be removed.
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The conversation among the four classmates is obviously focused on the meaning, nature and purpose of business. All human beings, wherever they may be, require different types of goods and services to satisfy their needs. The necessity of supplying goods and services has led to certain activities being undertaken by people to produce and sell what is needed by others. Business is a major economic activity in all modern societies concerned as it is with the production and sale of goods and services required by people. The purpose behind most business activities is to earn money by meeting people’s demands for goods and services. Business is central to our lives. Although our lives are influenced by many other institutions in modern society such as schools, colleges, hospitals, political parties and religious bodies, business has the major influence on our daily lives. It, therefore, becomes important that we understand the concept, nature and purpose of business.
1.2 CONCEPT OF BUSINESS
The term business is derived from the word ‘busy’. Thus, business means being busy. However, in a specific sense, business refers to any occupation in which people regularly engage in an activity with a view to earning profit. The activity may consist of production or purchase of goods for sale, or exchange of goods or supply of services to satisfy the needs of other people.
In every society people undertake various activities to satisfy their needs. These activities may be broadly classified into two groups— economic and non-economic. Economic activities are those by which we can earn our livelihood whereas non-economic activities are those performed out of love, sympathy, sentiments, patriotism, etc. For example, a worker working in a factory, a doctor operating in his clinic, a manager working in the office and a teacher teaching in a school— are doing so to earn their livelihood and are, therefore, engaged in an economic activity. On the other hand, a housewife cooking food for her family or a boy helping an old man cross the road are performing non-economic activities since they are doing so out of love or sympathy. Economic activities may be further divided into three categories, namely business, profession and employment. Business may be defined as an economic activity involving the production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society.
1.3 CHARACTERISTICS OF BUSINESS ACTIVITIES
In order to appreciate how business activity is different from other activities in society, the nature of business or its fundamental character must be explained in terms of its distinguishing characteristics, which are as follows:
(i) An economic activity: Business is considered to be an economic activity because it is undertaken with the object of earning money or livelihood and not because of love, affection, sympathy or any other sentimental reason.
(ii) Production or procurement of goods and services: Before goods are offered to people for consumption they must be either produced or procured by business enterprises. Thus, every business enterprise either manufactures the goods it deals in or it acquires them from producers, to be further sold to consumers or users. Goods may consist of consumable items of daily use such as sugar, ghee, pen, notebook, 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 for the satisfaction of human needs:
1.2 CONCEPT OF BUSINESS
The term business is derived from the word ‘busy’. Thus, business means being busy. However, in a specific sense, business refers to any occupation in which people regularly engage in an activity with a view to earning profit. The activity may consist of production or purchase of goods for sale, or exchange of goods or supply of services to satisfy the needs of other people.
In every society people undertake various activities to satisfy their needs. These activities may be broadly classified into two groups— economic and non-economic. Economic activities are those by which we can earn our livelihood whereas non-economic activities are those performed out of love, sympathy, sentiments, patriotism, etc. For example, a worker working in a factory, a doctor operating in his clinic, a manager working in the office and a teacher teaching in a school— are doing so to earn their livelihood and are, therefore, engaged in an economic activity. On the other hand, a housewife cooking food for her family or a boy helping an old man cross the road are performing non-economic activities since they are doing so out of love or sympathy. Economic activities may be further divided into three categories, namely business, profession and employment. Business may be defined as an economic activity involving the production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society.
1.3 CHARACTERISTICS OF BUSINESS ACTIVITIES
In order to appreciate how business activity is different from other activities in society, the nature of business or its fundamental character must be explained in terms of its distinguishing characteristics, which are as follows:
(i) An economic activity: Business is considered to be an economic activity because it is undertaken with the object of earning money or livelihood and not because of love, affection, sympathy or any other sentimental reason.
(ii) Production or procurement of goods and services: Before goods are offered to people for consumption they must be either produced or procured by business enterprises. Thus, every business enterprise either manufactures the goods it deals in or it acquires them from producers, to be further sold to consumers or users. Goods may consist of consumable items of daily use such as sugar, ghee, pen, notebook, 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 for the satisfaction of human needs:
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