A business is an organization. It
produce goods and services to make a profit. Business may divided into goods
producing and services producing firms.
The American business system is
known as private enterprise because the factors of production and the business
are owned by individuals. This system is based on the right to private
properties.
There are four factors of production
which include machinery, building, tools and means of transportation. To
produce goods and services in the private enterprise system, the four factors
of production are obtained from the individuals owning the business in exchange
for income.
The human element is the core of
business. Business needs people as owners, managers, and consumers. People need
business for the production of goods and services and creation of job
opportunities.
The person responsible for operating
the business is called a manager . The manager may be the owner or a professional employed by the
owner. A professional managers attempts to achieve the objectives of the
business.
Employees
supply the skill and abilities to provide or services. They expect to receive a
wage or salary for the use of their skills and abilities.
The target
of business is costumer. A consumer is a person or business who purchase a good
or services for personal or organisational use. The consumer, in an
economic system, wants better goods and
services. A business enterprise attempts to satisfy such needs and desires or
wants.
The
most common motive for the setting up a business is the profit motive. It is
the desire to make a profit as a reward for taking risks of running a
business. Profit or surplus income is total sales minus the coast of
productions. It is a measurement of one’’s success. A profit is not always
gained. Sometimes the business suffers Iosses.
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