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Explain the meaning of business and its main characteristics.

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Meaning of Business: All human activities that are related to purchase and distribution of goods or services and that are aimed at making profit, are called business. In the modern process of globalization business is also aimed at satisfaction of various needs of the whole society. In other words business includes all those legal human economic activities that are performed for regular production and distribution of goods and services and are aimed at securing social satisfaction so that the living standard of the society is improved.

Characteristics of Business:

1. Human Economic Activities: All economic activities related with earning of profit, by human beings, are business. Activities of non-economic men like saints, hermits or missionaries are not included in business. 

2. Transaction of Goods and Services: In business there is a transaction of goods and services and that transaction may be of consumer goods such as clothes, jewellery, sweets, etc. or industrial goods such as machinery, services like, transportation, warehousing, insurance, banking etc. are also included in business. 

3. Production and Distribution: In business both goods and services are produced and distributed but to produce the goods for one’s own use, is not business. 

4. Continuity in Business Transactions: Continuity in business is necessary for business distribution and production of goods and services. 

5. Legality: The illegal human activities like theft, smuggling, gambling, black marketing, etc. are not included in business. 

6. The Main Objective of Business is to earn Profit: Earning profit is very necessary to maintain development and expansion of business. 

7. Presence of Risk: There is a possibility of loss in every business. The capacity to bear such losses called risk. Greater the possibility of risk in a business, greater are the chances of earning profit in that business. 

8. Mutual Interest: Business is not done for one sided profit. It is for mutual interest or satisfaction. If the customer is not satisfied, the business cannot be stable in the market. Thus, the mutual interest or satisfaction between businessman and the consumers is very essential. 

9. Means of Social Change: Business can help people enhance their means of earning. An improvement in earning leads to better living standard and consequent change in the process of thinking according to social needs. 

10.Creation of Utilities: Creation of the quality of satisfying the consumers’ need in goods by the use of human abilities is called creation of utility.

Following utilities are created by business: 

1. Form utility 

2. Place utility 

3. Time utility 

4. Authority utility

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