Business, Commerce, Nature of Business, Characteristics of business. Definition and explanation of business,commerce and trade

1. Designed by
Qazi Zuhair
(KAZ Academy of Commerce and
Economics)
Introduction to business

2. Business
Any activity undertaken, performed or rendered for
the purpose of earning profit.
Business is an activity in which various persons
regularly produce or exchange goods and
services for mutual gain or profit.

3. CHARACTERISTICS
 Capital: is the lifeblood of every business. It is the
most essential and important element of business.
In case of deficiency, loans can be taken from
various financial institutions.
 Dealing in Goods and Services: Every business
deals with sale, purchase, production and
exchange of goods and services for some
consideration.

4. CHARACTERISTICS
 Employment Business: is a good source of
employment for its owners as well as for other
people.
 Islamic Process Business: Is an Islamic way of
earning living. Income from business is known as
profit, which is Rizq-e-Halal. The Holy Prophet
Muhammad himself did prosperous business.

5. CHARACTERISTICS
 Motive: The motive of business is to earn profit. Otherwise it
will not be termed as business.
 Organization: Every business needs an organization for its
successful working.
 Productions or Purchase of Goods: A businessman deals in
production or purchase of goods. These goods are supplied
to the people. So, it is necessary that more goods should
be produced so that demand of people may be fulfilled.

6. CHARACTERISTICS
 Regular Transaction Business: Has a nature of regular
dealings and series of transactions. So, in business, only
those transaction s included which have regularity and
continuity.
 Risks and Uncertainty Business: involves a large volume of
risk and uncertainty. The risk element in business keeps a
person vigilant and he tries to ward off his risk by executing
his policies properly.
 Sale or Transfer: for value Another characteristic of
business is the sale or transfer of goods for value.
 Social Welfare Business: does not only satisfy the
producer, but also the consumer when products are offered

7. NATURE OF BUSINESS
 Economic Activity: Business is an economic activity as it is
concerned with creation of wealth through the satisfaction
of human wants.
 Human Activity Business: is an economic activity and every
economic activity is done by human beings. Thus,
business is one of the most important human activities.
 Social Process Business: is run by owners and employees
with the help of professionals and customers. Thus,
business is a social process.
 System Business: is a systematic arrangement of various
elements, which leads to the attainment of particular
objective, according to a well-established plan.

8. COMPONENTS OF BUSINESS
Industry ƒ Commerce

9. Industry
Industry means that part of business activity, which
is concerned with the extraction, production and
fabrication of products.
KINDS OF INDSTRY
 1. Primary Industry
 2. Secondary Industry

10. Primary Industry
 Primary industry is engaged in the production
or extraction of raw materials, which are used
in the secondary industry
 Extractive Industry
 Genetic Industry

11. Primary Industry
 Extractive Industry: Extractive industries are those
industries, which extract, raise or produce raw material
from below or above or above the surface of the earth.
 Genetic Industry: Genetic industries are those, which are
engaged in reproducing and multiplying certain species
of animals and plants.

12. SECONDARY INDUSTRY
 These industries use raw materials and make
useful goods. Raw material of these industries is
obtained from primary industry.
 Constructive Industry
 Manufacturing Industry
 Services Industry

13. SECONDARY INDUSTRY
 Constructive Industry: All kinds of constructions are
included in this industry
 Manufacturing Industry: In this industry, material is
converted into some finished goods or semi-finished
goods.
 Services Industry: These industries include those
industries, which are engaged in providing services of
professionals.

14. End of Chapter