The document discusses the key concepts of business including definitions, characteristics, types of industries, commerce, trade, objectives, risks and factors to consider when starting a business. It provides definitions for primary industries as those involving extraction of natural resources, secondary industries as those that process primary outputs, and tertiary industries as providing support services. Profit, market standing, productivity and social responsibility are identified as objectives of business. Risks can arise from natural causes, human causes and economic causes. Key factors for starting a business include selecting an industry, business ownership structure, financing, and facilities.

2. CONCEPT OF
BUSINESS
Business may be defined as an economic
activity involving the production and sale of
goods and services undertaken with the motive
of earning profit by satisfying human needs in
the society.

3. CHARACTERISTICS OF BUSINESS
ACTIVITIES
An economic activity.
Production or procurement of goods and
services.
Sale or exchange of goods and services for the
satisfaction of human needs.
Dealings in goods and services on a regular
basis.
Profit earning.
Uncertainty of return.
Element of risks.

4. INDUSTRY
PRIMARY INDUSTRIES: These includes all
those activities, which are connected with the
extraction and production of natural resources
and reproduction and development of living
organisms, plants etc.
SECONDRY INDUSTRIES: These are
concerned with using the materials, which have
already extracted at the primary stage.
TERTIARY INDUSTRIES: These are concerned
with providing support services to primary and
secondary industries as well as activities relating
to trade.

5. COMMERCE
commerce is said to consist of activities of removing the
hindrances of person, place, time, risk, finance &
information in the process of exchange of goods &
services.
TRADE
Trade is an essential part of commerce . It refer to sale,
transfer or exchange of goods. It helps in making the
goods produced available to ultimate consumer or users.
AUXILIARIES TO TRADE
Activities which are meant for assisting trade are known
as auxiliaries to trade.

6. Auxiliaries to trade are briefly discussed below:-
(i) Transport & communication
(ii) Banking and Finance
(iii) Insurance
(iv) warehousing
(v)Advertising
OBJECTIVES OF BUSINESS
Profit may be regarded as an essential objective of
business for various reasons :-
(i) It is a source of income for business person
(ii) It can be a source of finance for meeting expansion
requirements of business.
(iii) It indicates the efficient working of business.
(iv) It builds up the reputation of a business enterprises.

7. MULTIPLE OBJECTIVES OF
BUSINESS
The objectives define what the business is going to do in
concrete terms that enable the business to analyse their
own experience and as a result improve their
performance.
(a) market standing
(b) innovation
(c) productivity
(d) physical & financial resources
(e) earning profit
(f) manager performance & development
(g) worker performance& attitude
(h) social responsibility

8. BUSINESS RISKS
The term risk refers to the responsibility of inadequate
profits or even losses due to uncertainties or
unexpected events. Its nature can be explained with the
help of its peculiar characteristics which are:
(I) Business risks arise due to uncertainties.
(ii)Risk is an essential part of every of business.
(iii)Degree of risk depends upon the nature & size of
business.
CAUSES OF BUSINESS RISKS
(I) Natural causes
(ii)Human causes
(iii)Economic causes
(iv)Other causes.

9. STARTING A BUSINESS- BASIC
FACTORS
(I) Selection of line of business
(ii)Size of the firm
(iii)Choice of form of ownership
(iv)Location of business enterprise
(v)Financing the proposition
(vi)Physical facilities
(vii)Plant layout
(viii)Component and committed worked forces
(ix)Tax planning
(x)Launching the enterprises

10. BASIC BUSINESS PROFESSION EMPLOYMENT
Mode of Entrepreneur's Membership of a Appointment letter &
establishme decision & other professional body services agreement.
nt legal formalities, if & certificate of
necessary. practice
Reward or Profit earned Professional fee Salary or wages
return
Capital It required as per Limited capital No capital
investment size & nature of needed for
business establishment
Risk Profits are uncertain Fee is generally Fixed & regular pay;
& irregular; risk is regular& certain; no risk
present some risk
Transfer of Possible with some Not possible Not possible
interest formalities
Code of No code of conduct Professional code Norms of behaviour
conduct is prescribed of conduct is to be laid down by the
followed employer are to be
followed