Today business has great importance in our lives, and we can easily see that people who own businesses are much more successful in their lives. Before talking about the importance of business, let’s 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.
The business also includes those activities which indirectly help in the 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 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 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 the business has expanded. The use of machinery is increased. The working business is being computerized very rapidly. So the importance of business in the present day world can be judged from the following activities:-
1. Mass production of goods
The use of automatic machines, new materials, and new processing methods has not only lowered the cost of production of goods but also helped the producers in producing goods in desired quality and quantity.
2. 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 by developing products according to the tastes and purchasing power of the customers. Therefore, markets have expanded consumption of goods due to the increase in the number of customers all over the world.
3. Provision of credit by banks
Commercial banks and specialized institutions are providing credit facilities to traders for producing goods and doing business on large scale.
4. Communication and transport
The fast-developed means of Communication and transport help traders these days in providing goods to customers at the right times, right place, and at the right price.
Today all the time busy in business making improvements by introducing new products as well as new methods are very helpful for the quality of products and reducing cost.
The business has generated employment on large scale both in rural and urban areas.
7. Source of revenue
Businesses is providing revenue to the state due to which the government maintains law and order situations, undertakes defense, and carries on welfare and development activities. A business pays a large share of taxes to the government.
8. Raising the standard of living
The business also helped the people to earn living either as owners of the business or employees. Higher incomes have led to an increase in the standard of living for people.
9. 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 tasks for earning profit are regarded as an important part of the 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 and be recovered. So insurance has given stability to the business.
In the modern world, all the above-mentioned elements play important roles in business. The 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 world.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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