Today business has great importance in our lives, and we can easily see that people who own business are much successful in their lives. Before talking about the importance of business, lets talk about business first. The word “business” means the state of being busy. So “business” means all those human activities which are related to the production and distribution of goods and services with the object of earning profit. E.g. Farmer, Fisherman, Manufacturer.
Business also includes those activities which indirectly help in production and exchange of goods such as transport, insurance, banking, warehousing etc. Every business enterprise whether it is carried on a small or a large scale deals in goods and services for earning of money. If an enterprise is to survive, grow and expand, it must yield profit. So business includes all the commercial and industrial activities that provide goods and services to the people with an objective to earn profit.
Importance of Business
The industrial revolution of the 18th century increased the scale of production, division of labor, specialization and standardization of goods. Over the years, the size of business has expanded. The use of machinery is increased. The working business is being computerized very rapidly. So importance of business in the present day of world can be judge from the following activities:-
01- Mass production of goods
The use of automatic machines, new materials and new processing methods have not only lowered the cost of production of goods but also helped the producers in producing goods in desired quality and quantity.
02- Expansion of market
In the modern world, goods are produced according to the needs of the customers. The business tries to satisfy the customers both within and outside the country be developing products according to the tastes and purchasing power of the customers. Therefore, markets have expanded consumption of goods due to increase in number of customers all over the world.
03- Provision of credit by banks
The Commercial banks and specialized institutions are providing credit facility to the traders for producing goods and doing business on large scale.
04- Communication and transport
The fast developed means of Communication and transport helping the traders in these days in providing goods to the customers at the right times, right place and right price.
Today all the time busy in business making improvements by introducing new products as well as new methods are very helpful for quality of products and reducing cost.
Business has generated employment on large scale both in the rural and urban areas.
07- Source of revenue
Business is providing revenue to the state due to which the government maintains law and order situation, undertakes defense and carries on welfare and development activities. Business pays a large share of taxes to government.
08- Raising standard of living
Business also helped the people to earn living either as owners of the business or employees. Higher incomes have lead to increase in the standard of living in people.
09- Business supplies services
Services occupy an important role in modern business life. The major services which are growing in importance are banking and finance, insurance, medical and health, education, legal, domestic servants, engineering and other professionals etc. All the services which perform simple or difficult task for earning profit are regarded an important part of business.
The various types of business risks which may happen due to fire , theft, flood, earthquake, strikes etc. can be insured and the loss if any arising out of the risks an be recovered. So insurance has given stability to the business.
In the modern world, all the above mentioned elements play important role in business. Business has increased the comforts of life of the people by mass production and distribution of goods. The banking sector, insurance companies, the fast means of communication and transport play a vital role in business in the present day of world.