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Definition of Business Activity, It refers to that economic activity which is conducted on regular basis to earn profit through the production and sale of goods and services.
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Business refers to that economic activity which is conducted on regular basis to earn profit through the production and sale of goods and services.
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What does business includes?, Supplying goods and services is done by different sets of people engaged in various economic activities such as production, manufacturing and distribution and exchange so that the needs and wants of customers are satisfied., , Business starts with production and ends with consumption., , Work of production is covered under ‘Industry’ and remaining under ‘Commerce’., , Business includes Industry, Trade and Commerce.
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Business= Industry + Commerce
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Types of goods produced in an industry, Producer Goods: which are used in production by other industries. These are also known as capital goods. Example machinery, plants, implements , etc., , Consumer Goods: which are directly put to use by consumers. Example bread, butter, milk etc., , Intermediate Goods: goods produced by industries for some need based goods. Example plastic , rubber, aluminium, etc.
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Primary industry
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Tertiary industry/ Service Industry, These includes those services which help business to move unhindered., These days are services are called industry. For example transport industry, banking industry, insurance industry, etc.
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Trade, Trade means exchange of goods and services for the purpose of mutual profit of both the buyer and the seller., Performers of these activities are called Traders., It can be carried out on the smallest as well as largest scale., Home Trade, (when buying and selling takes place within national boundaries), Local trade: limited to some village, town , etc., useful for perishable goods., State Trade: trade among districts of state, like trade in corn , pulses, utensils etc., Interstate Trade: trade among different states of country, includes those things which are produced in some particular state like sugar, cloth , machinery,, Foreign Trade, (when trade crosses the national boundaries. Every country buy things it needs and which are in short from other countries, and sells the things which it has in abundance to other countries), Import trade: when we buy from other country. Ex: India buy petroleum from Iran, Export Trade: when we sell to other countries. Ex: cotton, jute, tea etc., Entrepot Trade: When one country serve as a mediator between trade of two countries. Ex: England imports goods from South Africa and exports it to other European countries.
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Auxiliaries to Trade, All those activities which are undertaken to overcome the hurdles appearing in the way of trade are called aids to trade.
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History of commerce in India, Commerce in India has developed over a period of time to achieve the present form, it has to pass through various stages as follows: {DEVELOPMENT}, , Barter system: When goods are exchanged in place of goods. , Village Economy stage: people got divided into tribes, tribes divided into families, some families got themselves engaged in agriculture, while other started business, here emerges middlemen who purchase surplus goods from different families and in exchange sold the goods they needed., Money invention stage: In barter system there is absence of definite standards, earlier food grains was accepted medium of exchange. After this gold, silver and coins of other metal become popular., Town economy stage: At this stage, businessman started their businesses away from village , in city, now business is done with specialization of trade in a particular good and job as well, means of transport developed, business expanded and competitions begun., Industrial Revolution: Due to development of engineering, the power driven machines begin to use in production process. Many Industries established including textile industry, chemical industry, sugar industry, etc., Communication and Transport Development : with the development of telephone, fax, internet, e-commerce, there have been massive increase in foreign and national trade.
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Modes of transport: Camel, ox, Donkeys, ships, etc., Major Trading centre: Ahmadabad, Lucknow, Kashmir, Kolkata,etc., Major Imports of India, Pearl, wool, dates, dried fruits, etc., Major exports of India, Raw silk, cotton, leather, etc., Trading communities, Merchants: main group of performing trading activities. These communities include vaishya, baniyas, banjaras ,chetti. Items of trade were limited. People mainly deals in grains, pulses, salt, etc., Sarrafs and moneylenders: merchants of northern region did trading and perform job of money lenders as well, they were engaged in business of silver or golden jewellery., Brokers/ Dalals : their job is to make sellers and buyers of different goods meet together get transaction done and earn commission.
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Functions of Indigenous Bankers, Indigenous Bankers are any individual or private firm receiving deposits and dealing in hundies or lending money. Indigenous banking activity is limited to particular caste in India. Sarrafs in U.P., Chattiars in South, Keyas in Assam, Khatri in Punjab, etc., Banking Functions, To give loans or lending of money., To accept deposits., To deal in hundies., Non- banking functions, Speculative trade, Commission agents, Other businesses like trading and shop-keeping to recouping losses.
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Business Risk: Uncertainty is mother of risk. It is said that business tends to run for a long run and future is uncertain. Therefore possibility of loss in business is called business risk.
