Business: Its definition, importance, significance and classifications

   Wikipedia defines business that "A business, also known as an enterprise, agency or a firm, is an entity involved in the provision of goods and/or services to consumers". It is an organized and systematized activity for profit. It deals with activities of people chasing a common goal.
  It is an enterprise set up by individual, group or government for the main purpose of making profit. It provides goods and services for satisfaction of human wants.

  The modern society would find it difficult to exist without business because its various importance which are as follows:
 (1) It adds utility to goods and services for satisfaction of human wants.
(2) It helps to improve the standard of living of the people.
(3) It helps to create employment opportunity to large number of people and hereby reducing the level of unemployment.
(4) It takes care of welfare of the employees by making sure that they have good working condition, reasonable wage rate or salaries, e.t.c.
(5) It improves the quality of various goods and service.

        Business activities are classified on the basis of functions into:
(1) Industry
(2) Commerce

  Industry deals with the production and processing of goods and is called Industrial enterprise while commerce includes all those activities necessary for the storage and distribution of goods and is called Commercial enterprise.

          Industry can be recognized with the following characteristics:
(1) It is mainly the area of business that produces.
(2) It involves continuous operation.
(3) It produces both consumer and producer goods.
(4) It also creates utility goods.

     Industry is divided into two, namely:

• Primary Industry
• Secondary Industry

  Primary industry involves the various activities related with extracting, manufacturing and processing of natural resources.
  Secondary industry deals with the materials that have been produced at the primary stage. e.g mining of gold is primary while production of golden jewelries is secondary.

            Commerce
  Commerce includes all activities related with the placing of the goods before the final consumers. It removes difficulties in the course of exchange e.g insurance, banking e.t.c. Hence, it includes trade. Commerce involves exchange of goods and services for money or any other thing.

         Characteristics Of Commerce

1. It enables proper distribution of products.
2. It adds utilities to products by making them available always when needed.

         Relationship between Industry, Trade and Commerce
Industry deals with the production of goods and services, Trade deals with the sale and purchase of these goods while commerce arranges for their distribution. Thus, industry, trade and commerce are interdependent and cannot operate in isolation.

         Characteristics of Business
(1) No qualification required: Starting or establishing a business does not require a certain level of qualification.
(2) Huge capital requirement: It requires a huge capital to start. There are various financial institutions that one can go to source for the capital to start a business.
(3)Risk: Running businesses are usually accompanied by certain risks because every business has its own risks.
(4) Profit motive: Businesses are set up not for the purpose of just providing social value but for the main objective of making and maximizing profit.
(5)Measurement of efficiency: In business, efficiency is measured with the amount of profits the business is able to realize.