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BusinessAn Overview

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Literally, the word “business” means the state of being busy. Generally, the term business includes all human activities concerned with earning money. In other words, business is an activity in which various persons regularly produce or exchange goods and services for mutual gain or profit. The goods and services produced or purchased for personal use are not included in “business”.

• Business

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DEFINITIONS • According to L. H. Haney “Business may be defined as human activities

directed toward providing or acquiring wealth through buying and selling of goods.”

• James Stephenson says that: “Every human activity which is engaged in for the sake of earning profit may be called business.”

• In the words of B. W. Wheeler “An institution organized and operated to

provide goods and services to the society, under the incentive of private gain” is business.

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Structural Diagram

Business

Buying and Selling

Wealth

Buying and Selling

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Starting a business a careful planning. The better your plan, the better your chances. Creating a comprehensive plan for a new business includes:

Establishing Goals Surveying marketEstimating capital requirements Forecasting salesPredicting cash flow

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Market Product and Services

MeasurementChange

Customer Service

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NATURE OF BUSINESS

The following points state the nature of business in brief:

1. Economic Activity Business is an economic activity as it is concerned with creation of wealth through the satisfaction of human wants.

2. 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.

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3. Social Process Business is run by owners and employees with the help of professionals and customers. Thus, business is a social process.

4. System Business is a systematic arrangement of various elements, which leads to the attainment of particular objective, according to a well-established plan.

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Types of Business Organizations

• Sole Trader• Generral Partnership• Limited Partnership• Limited Liability

Partnerships (LLB)

• General Corporation

• Close Corporation• LLC• Sole Corporation

• Incorporated• Unincorporat

ed

Sole Proprietorship Partnership

CorporationCooperative

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Sole Proprietorship

• A sole proprietorship is an unincorporated business with one owner who pays personal income tax on profits from the business. With little government regulation, they are the simplest business to set up or take apart, making them popular among individual self contractors or business owners.

• Many sole proprietors do business under their own names because creating a separate business or trade name isn't necessary.Sole proprietorship is also known as "proprietorship".

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Partnership

• A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture. Various arrangements are possible all partners might share liabilities and profits equally, or some partners may.have limited liability. Not every partner is necessarily involved in the management and day-to-day operations of the venture. In some jurisdictions, partnerships enjoy favorable tax treatment relative to corporations.

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Corporation

• A corporation is a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes.

• The most important aspect of a corporation is limited liability. That is, shareholders have the right to participate in the profits, through dividends and the appreciation of stock, but are not held personally liable for the company's debts.

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Features of Corporation

There are three basics features of corporation.1. Limited Liability2. Perpetual Life 3. Transferability of Ownership

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COMPONENTS OF BUSINESSBusiness bears the following components:

• Industry• Commerce

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Industry• Industry is connected with the production and preparation of goods and

services. It is a place where raw material is converted into finished or semi-finished goods, which have the ability to satisfy human needs or can be used in another industry as a base material. In other words, industry means that part of business activity, which is concerned with the extraction, production and fabrication of products.

KINDS OF INDSTRY1. Primary Industry2. Secondary Industry

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CommerceCommerce is the second component of business. The term “commerce” includes all activities, functions and institutions, which are involved in transferring goods, produced in various industries, from their place of production to ultimate consumers.In the words of Evelyn Thomas:“Commercial occupations deal with the buying and selling of goods, the exchange of commodities and distribution of the finished goods.”In simple words, “trade and aids to trade” is called commerce.

Scope of Commerce

1. Trade2. Aids to Trade

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Qualities of a good Businessman

The modern business is very complex. Due to scientific and technological development, changes are taking place very fast in every business field. Following are the basic personal skills or qualities which a good businessman must possess:

1. Ability to Plan2. Activator3. Bold or Courage4. Cooperation5. Courtesy6. Decision Making7. Discipline8. Evaluator

9. Foresight10. Honesty11. Hardworking12. Initiation13. Knowledge14. Leadership15. Negotiator16. Negotiator

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• There is only one Boss. The customer. And he can fire everybody in the company simply by spending their money somewhere else.

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The End

Thank You all Stay Blessed

Worked By:Nasir Ali & Ali Raza