Q.Define Business. What are its characteristics?

Business is an economic activity concerned with the production or purchase and sale of goods and services with the aim of earning profit by satisfying human wants. Its characteristics are: an economic activity; dealing in goods and services; regularity of dealings; the profit motive; the presence of risk and uncertainty; the need for capital; and the creation of utility to satisfy human wants.

Meaning

The term 'business' is derived from the word 'busy', meaning being occupied in some work. In the economic sense, business means an occupation in which people regularly engage in activities connected with the production, purchase and sale of goods or the supply of services with the object of earning profit. Shopkeepers, manufacturers, transporters, bankers and insurers are all engaged in business.

Characteristics of Business

1. Economic activity. Business is carried on to earn a living and create wealth, so it is an economic activity.
2. Production or exchange of goods and services. Business involves either producing goods and services or buying and selling them; there must be transfer or exchange for value.
3. Regularity of dealings. A single, isolated transaction is not business; there must be regularity and continuity of dealings.
4. Profit motive. The primary object of business is to earn profit; without the profit motive it is not business. …