Business

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”.

Different Approaches:

1.  According to L. H. Haney 

“Business may be defined as human activities directed toward providing or acquiring wealth through buying and selling of goods.” 

 

2.  James Stephenson says that: 

“Every human activity which is engaged in for the sake of earning profit may be called business.” 

 

3.  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.

Characteristics of Business:

Following are the essential characteristics of a good business:  

 

1.  Capital 

 

Capital is the lifeblood of every business.  It is the most essential and important element of 

business.  In case of deficiency, loans can be taken from various financial institutions.  

 

2.  Creation of Utility 

 

Utility is an economic term referring to that characteristic of a certain commodity, which 

can satisfy any human need.  Business creates utility, which gives benefit to the entire 

society as well as the businessmen. 

 

3.  Dealing in Goods and Services 

 

Every business deals with sale, purchase, production and exchange of goods and services for 

some consideration. 

 

4.  Employment  

 

Business is a good source of employment for its owners as well as for other people, for 

example, employees, agents, transporters etc. 

 

5.  Islamic Process 

 

Business is an Islamic way of earning living.  Income from business is known as profit, which 

is Rizq‐e‐Halal.  The Holy Prophet Muhammad himself did prosperous business. 

 

6.  Motive  

 

The motive of business is to earn profit.  Otherwise it will not be termed as business.    

 

7.  Organization 

 

Every business needs an organization for its successful working.  A proper organization is 

helpful in the smooth running of business and achieving the objectives.

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.  

 

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.