What is a Business

A business is an organization. It produces goods and services to make a profit. Business may be divided into good producing and service producing firms.
The American business system is known as private enterprise because the factors of production and the business are owned by individuals. This system is based on the right to private properties.

There are four factors of production which include machinery, building, tools and means of transportation. To produce goods and services in the private enterprise system, the four factors of production are obtained from the individuals owning the business in exchange for income.
The human element is the core of business. Business needs people as owners, managers, and consumers. People need business for the production of goods and services and the creation of job opportunities.

The person responsible for operating the business is called manager. The manager maybe the owner or a professional employed by the owner. A professional manager attempts to achieve the objectives of the business.

Employees supply the skills and abilities to provide a product or service. They expect to receive a wage or salary for the use of their skills and abilities.
The target of business is consumer. A consumer is a person or business who purchase a goods or service for personal or organization use. The consumer, in an economic system, wants better goods and services. A business enterprise attempts to satisfy such needs and desires or wants.
The most common motive for setting up a business the profit motive. It the desire to make a profit as a reward for taking risks or running a business. Profit or surplus income is total sales minus the cost of a production. It is a measurement of one’s success. A profit is not always gained. Sometimes the business suffers losses.

EXERCISE:
Give your answer to the following questions about the passage briefly and in complete sentences.
1. What is the product of a business?
2. What do you call the business woned by individuals?
3. What are the four factors of productions?
4. Why human element is called core of business?
5. What do the business owner expect?
6. What is a manager?
7. What do employees do to provide a product or service?
8. What is the business target?
9. What is a consumers want?