BUSINESS STUDIES AND
MANAGEMENT
CHAPTER 1
NOTES
NATURE AND PURPOSE OF
BUSINESS
Nature and Purpose of Business
1. Meaning of Business
“Business" means an economic activity involving the production,
purchase, sale, or exchange of goods and services with the main
objective of earning profit and satisfying human wants.
Example: Shopkeeper purchases goods from wholesalers and sells
them to customers to earn profit.
2. Characteristics of Business
1. Economic Activity – Business is an economic activity because it is
undertaken to earn income or livelihood.
2. Production or Procurement of Goods and Services – A business
either produces goods/services or obtains them for sale.
3. Sale or Exchange – Goods and services must be sold or exchanged
for consideration. Production alone is not a business.
4. Regularity of Dealings – Business involves continuous or regular
dealings. A single sale is generally not considered a business.
5. Profit Motive – The main objective of business is to earn profit.
MANAGEMENT
CHAPTER 1
NOTES
NATURE AND PURPOSE OF
BUSINESS
Nature and Purpose of Business
1. Meaning of Business
“Business" means an economic activity involving the production,
purchase, sale, or exchange of goods and services with the main
objective of earning profit and satisfying human wants.
Example: Shopkeeper purchases goods from wholesalers and sells
them to customers to earn profit.
2. Characteristics of Business
1. Economic Activity – Business is an economic activity because it is
undertaken to earn income or livelihood.
2. Production or Procurement of Goods and Services – A business
either produces goods/services or obtains them for sale.
3. Sale or Exchange – Goods and services must be sold or exchanged
for consideration. Production alone is not a business.
4. Regularity of Dealings – Business involves continuous or regular
dealings. A single sale is generally not considered a business.
5. Profit Motive – The main objective of business is to earn profit.
