The document defines business as an economic activity involving the regular purchase, production, and sale of goods and services with the aim of earning a profit. It lists seven key characteristics of business activities: 1) being an economic activity, 2) production or procurement of goods and services, 3) the sale or exchange of goods and services, 4) dealing in goods and services on a regular basis, 5) profit earning, 6) uncertainty of return, and 7) element of risk. Business activities are further classified into industry, which involves converting resources into goods, and commerce, which includes trade and auxiliaries to trade like transport and banking.

1. PRESENTED
BY
MUTHU LAXMI
SECTION :A
BUSINESS

2. MEANING :
The term business is derived from the word Busy .
Thus business means being busy .Business refers to
an occupation in which people regularly engage in
activities related to purchase ,production and sale of
goods and services with a view to earning profits.

3. CHARACTERISTICS OF BUSINESS ACTIVITIES
1. An economic activity :
Business is considered to be an
economic activity because it is undertaken with the
object of earning money or livelihood and not because
of love , affection ,sympathy or any other sentimental
reason .
Eg. Purchase and sale by a shopkeeper or on large scale in a
more formal and organised level .

4. 2. Production or procurement of goods and
services :
Before goods are offered to people for
consumption these must be either produced or
procured by business enterprise either
manufactures the goods it deals in or it acquires
them from produces , to be further sold to
consumers or users.

5. 3.Sale or exchange of goods and services :
Directly or indirectly ,business involves
transfer or exchange of goods and services for value.
If goods and produced not for the purpose of sale
but say for personal consumption ,it cannot be
called a business activity.
Thus , one essential characteristic of business is that
there should be sale or exchange of goods or services
between the seller and the buyer

6. 4.Dealing in goods and services on a regular
basis :
Business involves dealing in goods or
services on a regular basis. One single transaction of
sale or purchase ,therefore , does not constitute
business.
Thus, for example if a person sells his /her
domestic radio set even at a profit , it will not be
considered a business activity.

7. 5. Profit earning :
One of the main purpose of
business of business is to earn income by way of
profit .No business can survive for long without
earning profit . That is why businessman make all
possible efforts to maximise profit ,by increasing
the volume of sales or reducing costs.

8. 6.Uncertainty of return :
Uncertainty of return refers
to the lack of knowledge relating to the lack of
knowledge relating to the amount of money that
the business is going to earn in a given period .
Every business invests money to run its activities
with the objectives of earning profit . But it is not
certain as to what amount of profit will be earned.

9. 7.Element of risk :
Risk is the uncertainty associated
with an exposure to loss. It is caused by some
unfavourable or undesirable event . The risks are
related with certain factors like changes to consumer
tastes and fashions , changes in method 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.

10. CLASSIFICATION OF BUSINESS ACTIVITIES
Various business activities may be classified into two
broad categories-
1. Industry
2. Commerce
Industry refers to economic activities ,which are connected
with conversion of resources into useful goods.

11. Industries may be divided into three broad categories-
1. primary industries
2. Secondary industries
COMMERCE:
Commerce includes two types of activities –
1. Trade
2. Auxiliaries to trade
Buying and selling of goods is termed as trade.
Auxiliaries to trade include transport, banking ,insurance ,
communication,advertisement etc.