1. ECONOMIC Activity: - Business is considered to be an economic activity because it is undertaken with the aim of earning money or livelihood.
2. Sale or exchange of goods or services:- Business involves transfer or exchange of goods and services for value addition . If goods are produced for self consumption and not for selling purpose , it can not be called a business activity . Cooking food at home for the family is not buisness , but cooking food and selling it to others in a restaurant is Business. Thus, one essential characteristic of business is that there should be sale or exchange of goods or services between the seller and buyer.
3. Production or procurement of goods and services:- Goods are offered to consumer after they are either produced or procured by business enterprises. Thus , every business enterprise either manufactures the goods it deals in or it acquire them from other producers , to be further sold to consumer or users.
4. Regular dealing in goods and services:- Business involves dealing in goods or services on a regular basis . Therefore, one single transaction of sale or purchase does not constitute buisness.
5. Profit earning:- One of the main objectives of business is to earn profit. No business can survive for long without earning profit. It is a source of income for business person and a source of finance for meeting expansion requirements of buisness.
6. Uncertainty of Returns:- Uncertainty of returns refers to the lack of security relating to the amount of money that the buisness is going to earn in a given period. Every business invests capital in its activities with the objective of earning profit. But it is not certain as to what amount of profit will be earned . There is even a possibility of losses being incurred even after the best efforts.
7. Element of risk :- Risk involves the possibility of inadequate profits or even losses due to uncertainties or unexpected events. It is caused by some unfavourable or undesirable event. The risks are related with certain factors like changes in consumer tastes and fashion , changes in method of production , strike or lockout in the workplace , increased competition in the market , fire theft , accidents , natural calamities etc. No buisness can eliminate task.
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