'Business is an organised institution that operates to provide goods and services under the incentive of private gain'. Discuss

cbse
natureofbusiness

#1

Yes, it is right to call business as an institution that provides goods and services for earning profit because of certain characteristics of business. Following are the main characteristics of business:

  1. Sale or exchange of goods and services for the satisfaction of human needs: Business involves sale or exchange of goods arid services. The production of goods or services for self-consumption is not business.
  2. Deals in goods or services on a regular basis : Another important feature of business is it must sell or exchange goods or services on a regular basis.
  3. Profit motive : The main purpose of business is to earn profit. If the profit motive is missing in a transaction, then it cannot be considered as business transaction.
  4. Risk : Another important feature of business is the presence of risk factor in the transaction.