Characteristics of Business ActivitiesIn 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:
- An economic activity: Business is Considered to be an economic activity Because its main aim to get profit. or livelihood and not because of love, affection, sympathy or any other sentimental reason.
- 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 to be Further sold to consumers or users. The consumer acquires them from producers, to be 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.
- Sale or exchange of goods and services for the satisfaction of human needs: business involves transfer or exchange of goods and services .If goods are produced not for the purpose of sale . 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.
- Dealings in goods and services on a regular basis: Business involves dealings in goods or services on a regular basis, on single transaction of sale and purchase. Thus, for example, if a person sells his/her domestic radio set even at a profit, it will not be considered a business activity. But if he/she sells radio sets regularly either through a shop or from his/her it will be a business activities.
- Profit earning: the main aims in business to get high profit: No business cannot live without earning profits. the businessmen will make all possible to get high profit. for getting profit they will increase the sale and reduce the cost.
- Uncertainty of return: Every business invests money (capital) is going to earn in given period. But it is not changes in consumer tastes and fashions, changes in methods Of production, strike or lockout in the work place, increased competition in the market, fire, theft, accidents, natural calamities, etc. No business can altogether do away with risks.
- Element of risk: Risk is the uncertainty and it may take to loss. Some causes it unfavourable or undesirable event. The risk will change according to the consumer tastes and fashions. The consumer always changing there taste so it's a great risk for business. , changes in methods of production, strike or lockout in the work place, increased competition in the market, fire, theft, accidents, natural calamities, etc.