Concept of Business

The word business comes from "busy," so at its simplest business means being busy. In a specific sense, business is an occupation in which people regularly engage in activities related to the purchase, production and/or sale of goods and services with the aim of earning profit.

Economic vs. non-economic activities

• People do many activities to satisfy their needs. These fall into two broad groups:
  • Economic activities — those by which we earn our livelihood.
  • Non-economic activities — those performed out of love, sympathy, sentiment, patriotism and similar motives.
• Examples of economic activity: a worker in a factory, a doctor in a clinic, a manager in an office, a teacher in a school — each works to earn a livelihood.
• Examples of non-economic activity: a homemaker cooking for the family, or a boy helping an elderly man cross the road — done out of love or sympathy, not for income.

Business as a formal definition

• Business may be defined as an economic activity involving the production and sale of goods and services, undertaken with the motive of earning profit by satisfying human needs in society.

Three kinds of economic activity …