Some basic tips of business: Meaning of business

Some basic tips of business: Meaning of business

The term ‘business’ has been defined by different authors in their own ways, not much of a difference is seen in these definitions. According to Urwick and Hunt, “Business is any enterprise which makes, distributes, or provides any article or service which other members of the community need and are able and willing to pay for.”  And many such definitions by different authors.

One can surely say that  business is fully an economic activity. As the process of buying and selling of goods and services is involved for the purpose of creating profit and generating wealth. Non-economic activities include activities such as providing food for the poor, cooking for one’s family and attending any function can not be termed as business because they are not generating wealth.

Now the second thing which is really important is Utility.Utility means the value or usefulness that the purchaser receives in return for exchanging money for the producer’s goods or services. Business can  make goods more of use for everyone by adding time, place, form and possession utilities to them.

It transports goods from the place where there is full stock to the place of scarcity. Storing can also be great. It makes goods available for usage in future. This is the reason why, everyone is able to satisfy wants and needs in an efficient and economical manner.

It is usually said that if there is business there is surely Risk.

What definition does risk hold in the context of business? It is used to denote the uncertainty of making profit or possibility of suffering loss. Risk cannot be separated from business.

How are these risks generated? There can be many reasons to name a few, Change in demand, changes in fashion or consumer taste, competition, government policies, economic recession etc. Change in demand however, the reward is a positive outcome of bearing risk. are the main causes behind creation of business risk.

Losses are also one thing that the business goes through due to natural calamities such as earthquake, tsunami, floods, strike by employees, theft, fire, inappropriate usage of company funds etc. These can also be prevented by correct forecasting and insurance but it is not possible to completely eliminate all risks.

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