For Plus one CBSE and State syllabus following students.

1. PREPARED BY
PRASANTH.S.R

2.  In order to satisfy human needs beings require
different types of goods and services. The form of
producing of good and services to those who are in
need of them. These are undertaken with the object
of earning money or livelihood. Hence, it is called an
economic activity. Business is a major economic
activity since it is concerned with the production and
sale of goods and services that people need.
Business has a greater role to play in our daily lives.

3.  Business means busyness or the state of being
busy . However, in a specific sense, business includes
all occupations in which people regularly engage in
activities with a view to earning profit. Such activities
may consist of production or purchase of goods for
sale , or exchange of goods or providing services to
satisfy the needs of others


4.  Activities undertaken with the object of
earning money or livelihood are known as
economic activities . for example ; a teacher
goes to school, a manager to his office, a doctor
to his clinic , a worker to the factory and a lawyer
to the court

5.  Activities which are
undertaken to derive
psychological satisfaction or
for religious or social
obligations, or are performed
out of love, sympathy,
patriotism and similar
sentiments are called non
economic activities.

6.  An economic activity since it is concerned with the production and
distribution of goods and service.
 Every business enterprise either produce goods or assembles them
from producers to be sold to consumers. Services denotes facilities
offered to consumers.
 Sales of exchange of goods and service for the satisfaction of human
needs.
 Business consisting of dealing in goods and service.
 Regularity or continuity of dealing in business activities.
 Profit is the main motto of exchanging goods and services.
 Business involves risk (Chance of loss)

7. The occupation of the
people or economic
activities can be
classified into three
broad categories
BUSINESS
PROFESSION
EMPLOYMENT

8.  Business refers to those
economic activities consist of
production or purchase of
goods for sales or exchange
goods or providing services
with the object of earning
profit. Those who are engaged
in the business activities earn
income in the form of profit.

9.  A profession may be defined
as an occupation which
involves the rendering of
personal services of special
and expert. Those engaged
in professions are known as
professionals. The
specialised services are
rendered to their clients for a
remuneration called fees.

10.  Employment is a kind of
human occupation where a
person perform the work
assigned to him by his
employer under an
agreement or rules of
services in return for a
remuneration called salary
or wages .
EMPLOYMENT

13.  Industry refers to
economic activities
connected with the raising,
production, conversion ,
processing or fabrication of
products. An industry may
be primary or secondary.

15.  Which are concerned with the extracting,
producing, and processing of natural resources.
Such type of industry may be further sub divided
into two;

16.  Which are engaged in
the extraction or
production of wealth from
soil, water or air extracting
minerals from under the
earth, fishing, procuring
timber from forests, etc...
are activities of extractive
industries.

17.  Genetic industries
refers to those activities
which are undertaken for
producing, breeding,
multiplying certain species of
plants or animals with the
object of earning profits from
their sales. Eg; cattle
breeding, poultry farming
etc...

18.  Manufacturing industries refers to
those activities concerned with the
conversion of raw materials or
semi_ finished products into
finished goods. The manufacturing
activities may be undertaken on a
small scale using simple tools and
equipments. But it is usually done in
factories.

19.  Analytical industry - this industry analyse and separates different
element from the same minerals eg.. oil refinery
 Synthetical industry - this kind of industry combines various
ingredients into new product eg...cement industry
 Processing industry - here involves successive stages of
manufacturing process to get finished goods eg.. sugar or paper
industry.
 Assembling industry - assembles different components into a new
product.
eg.. computer or television industry etc...

20.  CONSTRUCTION
INDUSTRIES
 It refers to those activities
concerned with the
construction of building,
roads, bridges, canals, etc..
their products are not
marketed like other industries.

21. It provide support service
to primary and secondary
industries. They also
include various activities
relating to trade.

23.  Commerce may be
defined as “ the sum
total of all those
processes which are
engaged in the removal
of the hindrances of
person , place and time
in the exchange of
commodities.
COMMERCE=TRADE+AIDSTOTRADE

24.  TRADE
 TRANSPORT
 WAREHOUSING
 STORAGE
 INSURANCE
 BANKING AND FINANCING
 ADVERTISING
 SALESMANSHIP

25.  It means buying and
selling of goods . but, there
are various other activities
that facilitate trade. These
activities called services or
auxiliaries to trade. This
include transport, banking,
insurance, warehousing,
packaging etc...

26. TYPESOFTRADE
Hometrade
(internal
Foreign
(external

27.  It also called internal trade or domestic trade consist of sale, transfer or
exchange of goods within country. The primary object of a home trade is to
bringaboutequitabledistributionofgoodswithinthecountry.
 Itinvolvesbuyinggoodsfromproducersinlargequantitiesandsellingthem
toretailersinsmallquantities.
 Retail trade consists in the supply of the requirements of the consumers in
small quantities needed by them . they buy large quantity from wholesalers
andgivetosmallquantitytocustomers.

29.  Foreign trade consists of trade among different nations. Here goods are
moved from one country to another. Foreign trade is mostly conducted on
wholesale basis. It is also known as international trade. It may be further
dividedinto;
- which consist of purchasing of goods from supplier of a
foreigncountryforhomeuse.
- which consist of the selling of home goods to foreign
countries
which consists of importing of foreign produced goods
from some countries with the object of re-exporting them to some other

30. 
 Organisations engaged in different types of
businessactivitiesarecalledbusinessenterprises.
It may be an industrial , trading or service
enterprises. These service enterprises facilitates
movement, storage, finance, risk coverage and
sales promotion of goods. They also help the
consumersinsatisfyingtheirneedsanddesires.

31.  Production usually takes place in particular locations. Here
thereisanobstacleorbarrierofplace.Thisisremovedbytransport
through various modes - road, rail, or coastal shipping transport
makes possible the physical movements of materials and goods
from the points of production to the place where they are needed
for consumption. Along with transport facility there arises the
need for communication facilities. These will help producers,
traders and consumers exchange information with one another.
Postal services, Telephonefacilitiesandvariousmodernmeansof
communication.

32.  Business requires funds for acquiring assets, purchasing raw
materials and meeting day to day expenses. Finance or fund
which is the foundations of business activities is provides by
banks.Theyacceptdepositfromthepublicandprovidedcredit
tothepublic.Theygenerallylendmoney byprovidingoverdraft
andcashcreditfacilities, loans andadvances anddiscountingof
bills. Besides, commercial banks undertake collection of
cheques, remittance facilities and various other services to the
business.

33.  In business , there are innumerable risk
such as destruction of property by fire,
earthquake,theft,damagesofgoodsheldin
stock, loss of goods in transit, etc... so,
insurance has been protects property and
human beings. On payment of a nominal
amountcalledpremium,theamountofloss
or damages is compensates by the
insurancecompany.

34.  Usually goods are produced in factories
orsmallscalebusinessunitsarenotsoldor
consumed immediately . there are to be
kept in good condition and make them
available as and when needed. Measures
should be taken for storage of goods to
preventlossordamage.Warehouseishelp
tostorageandstabilizepricebyequalizing
supplies.

35.  It is one of thee most important
devices of promoting sales,
especially consumer goods like
soaps, detergent, electronic goods
etc...it helps in provide required
information and inducing them to
buyparticularitems.


36. 
 Business activities are undertaken primarily to earn profit
because, profit is the lifeblood of the business. Business activities
cannotbeundertakeninisolationfromtherestofthesociety.Thus
businessactivitiesshouldbeconductedtofulfiltheexpectationsof
the societyandtheywill havemultiplicityofobjectives,including
social responsibility to survive and prosper in long run. It may be
statedherethatprofitistheprimaryobjectivebutnottheonlyone.

37.  Itisasourceofincome,anditprovidesthemeansforlivelihoodfor
the businessman.Nobodycan undertake business activities
without earningincometosatisfyhisneeds
 Profit may earned to provide growth and expansion of the
businessman
 Profit earning ability is considered to be the index of business
success.
 Profitistherewardfortheentrepreneur’stakingbusinessrisk.
 Profitprovideeconomicpowerandstatustobusinessman
 Itcanraisefundsoneasyterms.

38. Multiple objectives of business

39.  Businessactivitiescanbesustainedonlyifit
has a good standing in the market. This
necessitates of the business to lay down
objectives to establish a place in the market
andprotectitselffromcompetition.

40.  Innovation means exploring and discovering
ways and means by which products are made
more useful to customers. The business world is
highly competitive. In order to capture the
market, new or improved products must be
offeredforsale.Thisispossibleonlywiththehelp
ofnewmethodsofproduction.

41.  Productivity is ascertained by comparing the
valueofinputs.Itisusuallytakenasthemeasureof
efficiency. Every business must aim at greater
productivitybymakingthebestpossibleuseofthe
scarce resources like men, money, machinery,
materialsetc...itreducesthewastageofmaterials,
fuller utilisation of equipments, and allotting
fundswithduetoregardtothebenefitdelivered.

42. 
 Allbusinessestablishmentsrequirephysicaland
financial resources. Physical resources include
plant, machinery, offices etc... by financial
resourcesmeanfundtoproduceandsupplygoods
andservicestotheircustomers

43.  The primary objectives of the business is to
earn profit. It is driving force behind every
enterprises.Profithasmultipleobjectives.

44.  Good managers are needed by business enterprises to
conduct and co ordinate various business activities.
Managers must be motivated well to get the best out of
them.Managerperformanceanddevelopmentmustbean
importantobjectivesofanybusiness.

45.  Workers performance and attitude very much
determinetheproductivityandprofitabilityofany
business enterprise . every business enterprises
must provide the workers with incentives to
improvetheirperformance.

46. Social responsibility refers to the obligations of
businessmen to pursue those policies, to make those
decisions which are desirable in terms of the
objectivesandvaluesofoursociety.


47.  Risk means possibility of loss. In business, risk is unavoidable.
Business enterprise usually face two types of risk ;Speculative and
pure
 involves both chance for a gain or loss. Such risk
arise due to change in the market conditions like fluctuations in
demandandsupply,changeintastesandhabitsofcustomers.
 involvesthepossibilityoflossorevennoloss.Fire,theft,
earthquake,strike,etc...areexampleofpurerisk.

48. BUSINESSRISKARISESDUETOUNCERTAINTIES
Byuncertainty wemeanlackofknowledgeaboutwhatisgoingtohappen
inthefuture.Eg.Naturalcalamities,changesinGovt.Policyetc..
 RISKISANESSENTIALPARTOFEVERYBUSINESS
Riskisinherentineverybusiness.Businesscan’ttotallyavoidriskalthough
thedegreeofriskmaydifferfrombusinesstobusiness.Riskcanbeminimised
but,cannotbeavoid.

49. Degreeofriskdependsmainlyuponthenatureandsizeofbusiness
Nature of business( volume of production and sale ) very much
determine the degree of risk. Large scale business had more risk than
smallscalebusiness.
Profitistherewardforrisktaking
Riskandgainaretwosidesofthesamecoin.Norisk,Nogain,isanage
old principle, is applicable to all kinds of business. Greater the risk,
moreisthereward

50.  Asnobusinesscanescapefromvariousrisks,allthatcanbedoneisto
apply different methods to deal with them. For instance an
enterprise may
 Decidenottoenterhighriskbusinesstransactions
 Takeprecautionarymeasureslikefirefightingequipmentstoreduce
risk
 Takeaninsurancepolicytocovervariousrisks
 Takemeasurelikeprovisionsforbadanddoubtfuldebts,investment
fluctuations,etc.,toassumerisk

51. Naturalcauses-damagesfromflood,fire,earthquakes,etc.,
Human causes - caused by theft, bad debts, invalidated contracts
and otheractsofgeneralpublic.
Riskarisingfromcompetition- intheformofentryofnewproducts
intothemarket,lowcostofproducts,newinventionsetc..,
Pricefluctuations- thismaytotallyupsetstockvalues,sellingprice,
budgetproposals,costandincomeforecast.

52.  Risk due to mismanagement - wrong management decision about the use of
capital and other resources, lack of proper planning and control, lack of
researchand techniqueknowledgeetc..,
 Risk due to changes in demand - risk may also arise due to changes in demand
which depends upon the likes and dislikes, styles, fashions, consumer’s
income…
 Governmentpolicy -Govt.Regulations,changesintaxstructure,international
relations,etc..,maycauseheavylossestoabusinessman
 Internalbusinessenvironment- personalfailurefromdeath,accident,illhealth
e tc.., and dishonest act in the form of embezzlement of funds and theft of

54.  Abusinessopportunitymaybeto;
 Startanewbusiness
 Expandordiversitytheexistingbusiness
 Purchaseanothercompany
 Enterajointventureofforeigncollaborationsetc..

55. 
 The promoter has to decide the size of the
business. He decide large, medium, or small scale
unit.it depend up on economics of scale, future
demand,financeetc..,

56.  The promoter must decide about form of
ownership.Theformofbusinessownershiparesole
trader, partnership, private and public company
etc.., the form of ownership depends upon size of
business,finance,tax,extentofliabilityetc..,

57.  The promoter must decide about the location of
the business. He must consider factors like
availability of land, electricity, water, nearness to
market,transportation,scopeforexpansionetc..,

58. Finance is the lifeline of the business. The promoter has to decide
about business capital requirements and also find out different
sourcesoffinance.
Thefinanceneedofbusiness.(shorttermorlongterm)
Sourceoffinancelikeshares,debenture,loansfrombanksetc..,
Costofcollectingfinanceandreturnsoncapitalinvested
Thecapitalstructureandappropriatetimeforcollectingfinance
Sourceofworkingcapital

59.  Physical facilities means the resources used to
convert raw materials into finished products.
Promoters has to decide about the machines and
equipments. And skilled and unskilled workers
requiredtojob.

60.  Layout means arrangements of physical facilities
like machines, equipments and workers required
for manufacturing goods. So promoter have a good
plantlayout.

61.  A proper organisational structure is needed to
conduct business smoothly and efficiently. The
employees are assigned their duties and important
responsibilities. It develop relationship between
them.

62.  A business enterprise require skilled and semi
skilled workers to do factory and clerical jobs. The
successofallbusinessisdependsuponselectingthe
rightmanfortherightjob

63.  Registration is a very important step. It is
notcompulsory,butisbeneficialtobusiness.
mainreasonsforregistration
Itgiveslegalentityandstatustothebusiness.
 Getallgovt.Assistanceandincentives
Getlicencetoimportrawmaterials.

64. 
 After registration, the promoter start
business. He brings together the physical
facilities, starts the production process,
recruits labour produces and distributes
goods.

65.  The promoters has to decide about the tax
liability. It cannot be avoided, but it can be
minimised by better management. Tax
planningdoesnotmeannonpaymentof tax.
tax planning influences the promoter’s
decision about location, size, form and
profitabilityofthebusiness.