Chapter-1

Concepts of Business
 Topics to be Covered in this Chapter
Chapter Contents
1.1. Introduction. 1.11. Advantages of Business.
1.2. Definition of Business. 1.12. Scope of Business.
1.3. Origin and Evolution of 1.13. Prerequisites of a
Business. Successful Business.
1.4. Elements of Business. 1.14. Essential Qualities of a
1.5. Nature of Business. Successful Businessman.
1.6. Characteristics of 1.15. Business Motivation.
Business. 1.16. Is Business an
1.7. Objectives of Business. occupation?
1.8. Functions of Business. 1.17. Present Scenario of
1.9. Basic Principles of Business.
Business. 1.18. Problems and Prospects
1.10. Importance of Business. of business in Bangladesh.
Definition of Business
Business means the state of being busy or
engaged in any work. Any kind of legal
activities for the intention to earn profit is
called business.
The word ‘Business’ is come from the
English words ‘Busi+Ness’ that means
business is concerned to all human
activities with earning profit.
 Many scholars define the business from many
perspectives. Some of these definitions are as
follows:
1. Lewis H. Haney: Business may be defined as
human activity detected toward producing or
acquiring wealth through buying or selling goods.
2. R. W. Babson: Business includes those human
activities relating to the production and the
distribution of goods, services and ideas with a view
to earning profit.
3. B.O Wheeler: Business is an institution organized
and operated to provide goods and services to the
society .
4. R.H. Hodgetts: Business is an organized approach
used by individuals for the purpose of providing
goods and services to mankind for a profit.
5. Norman Richard Owens: Business means an
enterprise engaged in the production and
distribution of goods for sale in a market or the
rendering of services for a price.
6. Y. K. Bhushan: Business may be defined as the
organized production or sale of goods undertaken
with the object of earning profit through the
satisfaction of human wants.
7. Skinner and Ivancevich: Business is the
exchange of goods, services or money for mutual
benefit or profit.
Origin and Evolution of Business

Evolution of
Business

Ancient age Middle age Modern age

Top 10 Advices on Starting a Business

1. Do what you like:

2. Start your business while you're still employed:
3. Don't do it alone:
4. Get clients or customers first:
5. Write a business plan:
6. Do the research:
7. Get professional help:
8. Get the money lined up:
9. Be professional :
10. Get the legal and tax issues right the first time:
 Elements of Business

Elements of Business
1. Capital. 6. Profit motive.
2. Organizational 7. Risk and uncertainty.
institution. 8. Transaction in terms of
3. Specific location. money.
4. Labor 9. Auxiliary elements.
5. Goods and services. 10. Validity
 Nature of Business

1. Economic activities:
2. Profession:
3. Employment:
4. Business activities oriented:
 Characteristics of Business

Characteristics of Business
1. Production or 7. Regularity of dealings
acquisition of goods 8. Uncertainty or risk
2. Economic activities about future
3. Sale or transfer of 9. Profits as reward for
title service rendered
4. Creation of utility 10. Flexibility
5. Dealings in goods and 11. Developing good
services relation
6. Service motive 12. Forecasting
 Objectives of Business
Objectives of Business

Economic Objectives Social Objectives Human Objectives National Objectives

1. To earn profit 7 To deliver 1. To do justice to 1. To strengthen of
2. To invest capital services labors economic
3. To produce products 7 To create 2. To pay the fair value structure
4. To utilize wealth employment of raw-material 2. To increase
properly 7 To develop living supplier national income
5. To create customers standard 3. To create human 3. To distribute
6. To use manpower 7 To maintain actual relations income and
properly income on 4. To create good wealth properly
7. To conduct research investment atmosphere of work 4. To remove
and innovate new 7 To abandon anti- 5. To ensure stability of unemployment
product social activities service problem
8. To keep stability and 7 To participate in 6. To take initiatives of 5. To protect the
progress of business welfare activities workers welfare state
6. To be refrained
from anti-national
activities
 Functions of Business

Functions of Business
1. Planning 9. Advertisement and
2. Production publicity
3. Purchase 10. Personnel function
4. Sale 11. Management
5. Warehousing 12. Financing
6. Insurance 13. Accounting
7. Product grading and 14. Distribution
standardization 15. Forecasting
8. Market research
 Basic Principles of Business
Basic Principles of Business
1. Specific objectives
2. Perfect organization
structure
3. Proper planning
4. Optimum financing
5. Specific location and
size
6. Efficient management
7. Smooth production and
distribution
8. Rendering proper service
9. Widespread publicity
10. Research and development
11. Risk bearing capacity
12. Good human relations
13. Economy
14. Right accounting policy
15. Principles of proper
marketing
 Importance of Business
Importance of Business

A. Economic Importance B. Social Importance

Proper utilization of resources Supply of goods and services
1. Division of labor 1. Employment
2. Utilization of developed 2. Improvement of the living standard
technology 3. Development of efficiency
3. Increase government revenue 4. Assistance in expansion of
4. Encouraging savings education, culture and industrial
5. Capital formation and its proper arts
utilization 5. Urbanization
6. Growth of personal and national 6. Help to industry
income 7. Development of international
7. Development of transportation relationship
8. Development of banking and
insurance
 Scope of Business

(2)
Commerce

(3)
(1)
Scope of Business Aids to commerce
Industry
and industry

(4)
Direct services
Prerequisites of a Successful Business

1. Company objectives:
2. Planning:
3. Good relation between employers and employees:
4. Market research:
5. Materials research:
6. Equipment and process development:
7. Smooth distribution:
8. Structural sound organization:
9. Adequate finance:
10.Risk bearing capacity:
11.Attractive location:
12.Effective and efficient management:
Essential Qualities of a Successful

1. Entrepreneurial capacity:
2. Ability to take risk:
3. Accuracy:
4. Working skill:
5. Organizational ability:
6. Time sense and foresight:
7. Service motive:
8. Honesty or business morality:
9. Consistency and dependability:
10. Self-confidence:
11. Initiative and capacity to make decision:
12. Ability to co-operate:
13. Energy:
14. Personal qualities:
Motivation for Conducting Business

1. Creation of employment:
2. Livelihood:
3. Profits:
4. Independent occupation:
5. Social welfare:
6. Desire for power and leadership:
7. Saving of family Business:
8. Development of country:
9. Realization of a dream:
10. Assistance to future:
Problems of Business in Bangladesh

Internal problems of business

1. Lack of efficient entrepreneurship and
management:
2. Limitation of capital:
3. Limitation in transportation and
communication system:
4. Insufficient assistance of government:
5. Corruption and mismanagement:
6. Crime, political inconsistency and strike:
7. Lack of knowledge on customer service:
8. Low quality of the products:
External Problems of Business:
1. Lack of efficient exporters in Bangladesh.
2. Lack of industries which can export the products.
3. Inability to compete with the international competitors.
4. Lack of confidence of the importers.
5. More dependency on the garments industry.
6. Problems of late shipments of the products.
7. Problems of the quality of the products and packaging.
8. Corruption and inefficiency of the related organization of
export and import.
9. Lack of proper promotion systems of the imported
products.
10. Lack of backward and forward linkage to expand the
export.
11. Political instability, crime and other problems.
12. Lack of assistance of the government and the government
institutions.
Braches or Classifications of

1. Industry:
i) Primary Industry:
a) Extraction Industry:
b) Genetic Industries:
ii) Secondary industry:
a) Manufacturing industries:
b) Service industries:
c) Construction industries:
Braches or Classifications of
Business Page No-60
Branches or Classifications of
Business
1. Industry:
i) Primary Industry:
a) Extraction Industry:
b) Genetic Industries:
ii) Secondary industry:
a) Manufacturing industries:
b) Service industries:
c) Construction industries:
Braches or Classifications of

2. Commerce:
a) Hindrances of persons:
b) Hindrances of place:
c) Hindrances of time:
d) Hindrances of exchange:
e) Hindrances of information:
3. Trade:
a) Internal Trade:
b) Foreign or International Trade
c) Wholesale Trade:
d) Retail Trade:
e) Aids of commerce and industry:
f) Direct services:
Thank You