1. Human Activities
Human beings perform different activities every day to fulfill their needs and wants. These activities are broadly divided into economic and non-economic activities.
2. Non-Economic Activities
Non-economic activities are those activities which are carried out without any expectation of money. These activities are performed for personal satisfaction, love, affection, social responsibility, or religious feelings.
Examples:
- A mother cooking food for her family
- Teaching children at home
- Helping poor or disabled people
- Social and religious services
3. Economic Activities
Economic activities are those activities which are performed to earn income or livelihood. These activities help people satisfy their material needs.
Economic activities are classified into:
- Business - Systematic activity for profit
- Profession - Specialized services for fees
- Employment - Working for others for salary
4. Business
Meaning of Business
Business refers to a systematic and organized activity in which goods and services are produced and supplied to consumers with the main objective of earning profit. Business not only earns income but also fulfills the needs of society by providing useful products and services.
Important Characteristics of Business:
- Business is an economic activity
- It involves exchange between buyer and seller
- Profit earning is the main motive
- Production or procurement of goods and services
- Goods and services are exchanged for money or value
- Business deals in consumer goods, capital goods, and services
- Regular and continuous transactions
- Income from business is uncertain
- Business always involves risk
- Customer satisfaction is the ultimate goal
5. Profession
Meaning of Profession
Profession is an economic activity where a person uses special education, training, and skills to provide expert services in return for fees.
Examples:
Doctor, Lawyer, Chartered Accountant, Architect, Engineer
Features of Profession:
- Service along with income earning
- Specialized qualification is compulsory
- Fees are charged for services
- Moderate capital investment
- Registration with professional body is required
- Profession cannot be transferred to another person
- Work is based on expert knowledge
6. Employment
Meaning of Employment
Employment is an economic activity in which a person works under another person or organization in return for fixed wages or salary. There exists an employer–employee relationship.
Features of Employment:
- Main aim is to earn regular income
- Qualifications depend on job nature
- Salary or wages are fixed in advance
- No capital investment by employee
- No professional registration required
- Job is non-transferable
- Employee works as per instructions
7. Objectives of Business
Business objectives are the goals that guide business operations. They are divided into economic objectives and social objectives.
A. Economic Objectives:
- Earning profit
- Expanding customer base
- Introducing new products and ideas
- Efficient use of available resources
B. Social Objectives:
- Supplying good quality products
- Avoiding unfair business practices
- Creating employment opportunities
- Ensuring employee welfare
- Contributing to society's development
8. Role of Profit in Business
Profit is the excess of income over expenses. It plays a very important role in the success and survival of business.
Importance of Profit:
- Provides return to investors
- Supports research and innovation
- Helps in business growth and expansion
- Improves efficiency and motivation
- Acts as livelihood for businessmen
- Reward for taking business risks
- Ensures long-term survival
9. Classification of Business Activities
Business activities are classified into Industry and Commerce.
10. Industry
Meaning of Industry
Industry includes activities related to production, processing, and extraction of goods as well as providing services.
Types of Industry:
| Type | Description | Examples |
|---|---|---|
| Primary Industry | Depends on nature | Agriculture, mining, fishing, plant nursery |
| Secondary Industry | Converts raw materials into finished goods | Manufacturing and construction industries |
| Tertiary Industry | Provides support services | Transport, banking, insurance, tourism |
Note: Industry creates form utility.
11. Commerce
Meaning of Commerce
Commerce deals with the distribution of goods and services from producers to consumers. It helps in smooth flow of trade.
Commerce includes:
- Trade - Buying and selling of goods
- Auxiliaries to Trade - Support services for trade
12. Trade
Meaning of Trade
Trade refers to the buying and selling of goods and services for money or money's worth.
Types of Trade:
A. Internal Trade:
- Wholesale trade
- Retail trade
B. External Trade:
- Import trade
- Export trade
- Entrepot trade
13. Auxiliaries to Trade
Auxiliaries to trade are supportive activities that help trade function smoothly by removing difficulties.
Types of Auxiliaries:
- Transport – removes distance barrier
- Warehousing – removes time gap
- Insurance – reduces business risk
- Banking – provides financial support
- Advertising – creates awareness
- Mercantile agents – connect buyers and sellers
- Communication – helps information flow