What Is Business?

Business id a word that is commonly used in many different languages. But exactly what does it mean? The concepts and activities of business have increased in modern times. Traditionally, business simply meant exchange or trade for things people wanted or needed. Today it has a more technical definition. One definition of business is the production, distribution, and sale of goods and services for a profit. To examine this definition, we will look at its various part.

First, production is the creation of services or the changing of materials into products. One example is the conversion of iron or into metal car parts. Next, these products need to be moved from the factory to the marketplace. This is known as distribution. A car might be moved from a factory in Detroit to a car dealership in Miami.

Third is sale of goods and services. Sale is the exchange of a product or service for money. A car is sold to someone exchange for money. Goods are products that people either need or want; for example, cars can be classifeid as goods. Services, on the other hand, are activities that a person or group performs for another person or organization. For instance, an auto mechanic perform a service when he repairs a car. A doctor also performs a service by taking care of people when they are sick.

Business, then is a combination of all these activities: production, distribution, and sale. However, there is one other important factor is the creation of profit or economic surplus. A major goal in the functioning of an American business company is making a profit. Profit is the money that remains after all the expenses are paid. Creating an economics surplus or profit is, therefore, a primary goal of business activity.