A business transaction is defined as any activity that is performed to earn a profit.
The definition of business can also include manufacturing of product and sending them to the customers and also buying a product and selling it at a margin to the end-users. Any such form of transactions is termed as business activities. The business also includes not on the product but also service.
In the case of services, the exchange of services is against revenue. Services are provided directly to the end-user and not via a chain of middlemen.
Every business transaction and without selling of a product at immersion the higher price, which would be lesser than the maximum retail price or the list price of the product.
When the selling prices more than the cost price, that is when profit is earned and earning a profit is invariably the bottom line of every business activity.
Features of Business
Business can be of different types, including different products and different industries and also include a variation of products and services or a combination of both.
In spite of such huge variation and the magnanimity of the businesses, there are few basic features which are common to every business. Foreign review the features of business
#1. Economic growth
Business is an activity in which there is either the manufacturing or selling of a product to the end customer to earn profits.
Starting a new business requires to venture into different fields, and when a new business starts automatically creates new job opportunities for different people.
Because of the newfound jobs, people earn better, and their paying capacity increases. As the paying capacity of people increases, people start to purchase higher-priced products and premium products because of the affordability.
This further process the businesses to start manufacturing of premium products and thus it creates for more jobs.
This creates a cycle whereby everybody is benefited, and everyone earns. Because the paying capacities of people increase, it invariably increases the economy. Business and economy are two integral parts of the same coin.
The growth of people in terms of monetary value as well as in terms of economy is linked inseparably to the growth of the business.
#2. Social and Societal upliftment
The business helps to increase the social status of people, and this is possible with the business creates job and job empowers people with better finances cycle. People can produce and consume better products which have to increase their social status.
The increase in purchasing power gives people the strength and confidence of having a better social status as compared to others. Business objectives are designed in such a way that they end up uplifting society.
Social growth happens when people earn a better income and able to have a better paying capacity. Business not only promotes the growth of the economy but also develops society along with a better quality of life for people.
#3. Promotes Innovation
Whenever a business is launched with unique products, it usually consists of innovative products. These products are under patent for a pre-defined period, during which other competitors either have to wait till the patent period is exhausted and then come up with cheaper replicas or work on innovation of the product itself, thereby promoting the Research and Development department of the organization.
In the second case, different companies invest in their and division, and this gives birth to innovative products for the customers.
For example, Apple was known for its innovative products like the iPhone, iPad, and other products, and for a long time, there was no competition.
Later the companies like Samsung and Google have started providing tough competition for Apple and providing better and more innovative products at the same time.
#4. Invites healthy competition
The business promotes innovation amongst the other companies so that their businesses may grow and customers are provided with options of different products. As one business grow, similar businesses crop up and start providing substitute products and cheaper products for the customers.
This promotes competition amongst different companies and grows them by growing the society in turn. More companies mean more jobs and more employment, which grows the economy. The healthy competition also ensures that there is no monopoly in the market.
#5. Risks
Business is unconditionally associated with risks, and every entrepreneur who begins a business knows this and yet undertakes it. There is always a risk of failure or a period when the business goes slow, and the sales fall.
In such circumstances, the business has to continue and hope for a better period in subsequent months.
There are internal risks like employee management, growth of the company, profitability of the company, and other matters and also external risks like competition, product losses, supplier demands, and other business risks. In spite of all of this, the business is still supposed to continue its dealings and transactions.
Apart from these risks, there are always unpredictable risks like natural calamities, theft, fire, and other risks, and in spite of all these risks, the business continues. It is said that risks and business are two sides of the same coin.
#6. Exchange of goods and services
Business transactions involve the exchange of goods and services which originates from the barter system. With the rise in the use of currency, the goods and services are exchanged against the currency, but sometimes the exchange continues.
In the case of bulk deals, sometimes the companies offer their services against the exchange of goods from other companies.
For example, coca-cola tied up with McDonald’s to form a combo of burger and drink. In return, McDonald’s can provide either free burgers to the employees of Coca-cola or provide monetary benefit.
#7. Marketing and Promotional activities
Every business uses marketing and promotional activities to promote their products and their offerings to the customer.
It is ensured that the features and benefits of the products are also mentioned so that it is easier for the customer to make the purchase decisions. Highlighting these facts requires high technical skills and know-how about the product.
Promotional activities are also carried, including advertising and digital advertising for the relevant products. Reach of the product to the customers is of paramount importance because without having reached the customers will be unable to make an informed decision.
The marketing department is, in fact, one of the most important departments of the company for promotional activities. Marketing is one of the important features of any and every business.
#8. Profitability
Every business transaction is performed to earn a profit. This profit is surplus, which is left after the transaction, and the bottom line of every business is to earn a profit.
A reasonable profit is the aim of every business. Without profit, the business would not be able to function and sustain in the market.
Not only that but the profit has to be continuous and is to be generated month on month. Profit grows the business and inevitably grows employees as well as society. Better the profitability, better are the chances of business growth.
#9. Giving back to the community
In order to survive, the business needs to utilize multiple resources right from natural resources to monetary to people. These days businesses have realized their responsibility, and they are not only after consuming the resources, but they have also started to give the society back through their Corporate Social Responsibility (CSR) initiatives.
Activities like planting and growing trees, cleaning the premises and keeping them clean, helping underprivileged sections of society with their offerings are few of the example of the corporate initiatives undertaken by many companies.
For modern businesses, giving back to the community has become one of the important features of the business.
#10. Fulfilling needs of Customers
Business is about producing and supplying the goods and services which are essential for the customers. Customers have various needs and want, and the sole purpose of businesses is to fulfill those needs by providing various assortment of products and services.
Customers should not be presented with only one product, but it is essential that they should be given multiple varieties of the same product.
For example, if the requirement of the customer is a 4GB Ram phone with 12 MP Camera, and if the only available option is an iPhone, it will be a major disappointment for the customer. In such a case, the company will form a monopoly which may not go very well with customers.
This is why multiple companies strive to fulfill the demands of the customer. Fulfilling the needs of the customers is the feature, necessity, and characteristic of every business.
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