What is a Business

Without exception, all of us survive because of business ventures. Either it could be our own business, or we earn by working for someone else. In this context, we are talking about the exchange of goods and services for money. The sole aim of the person or persons running a business is to make a profit. A business, maybe run by individuals, or a group of persons (partnership firms), or a company or even a Trust.

It may be a street vendor who sells his goods from door to door or your neighborhood grocery store or a big mall selling various brands of merchandise, or

the service of a dhobi who iron your clothes, or the two-wheeler mechanic shop on the roadside, or a big company, providing you mobile phone and data service, or a small engineering industry supplying components to ancillaries of automobile industries, or it may be a company manufacturing airplanes or even a large petroleum refinery.

It may be a farmer cultivating paddy on his small patch of land or thousands of acres of tea estate owned by a big company. Restaurants, hospitals, and schools are some of the other examples of businesses.

While a majority of the people would prefer to work for someone who owns a business, there are quite a few brave hearts who are prepared to take the risk of starting their own business. We call them entrepreneurs. An individual or a group of like-minded individuals who take the initiative to start any business are called the promoter or promoters. They arrange for the capital – that is the money needed for starting the business.

The promoter/s ventures into business with lots of hopes to make it big and quite a number of them succeed. Almost every big name you hear today started small. Not everyone is fortunate enough to enter the big league. Some only manage to keep themselves afloat while many have lost all their investment. It is a fact that investments in a business have the potential to generate better returns than from any other source. It is also a fact that any business can fail even if they have been doing remarkably well for the last many years. Anyone who wishes to invest in any business venture must be fully aware of the risks involved.

The constitution of a Sole Proprietary concern or a Partnership firm or a Partnership firm with limited liability (LLP) or a Private or a Public Company incorporated under the Company’s Act, will depend on the size of the business and the capital required. You will agree that the initial capital for starting a business may range between a few thousand rupees and thousands of crores of rupees.

A street vendor selling his goods from door to door, or your neighborhood grocery store or a big mall selling various brands of merchandise, or the service of a dhobi who iron your clothes, or the two-wheeler mechanic shop on the roadside, or a big company, providing you mobile phone and data service, or a small engineering industry supplying components to ancillaries of automobile industries, or it may be a company manufacturing airplanes or even a large petroleum refinery.