The process of economic activities to produce products or render services to earn profit, is known as business.
Business is every where in the world, and everyone is linked with, engulfed by the business.Business denotes those human activities, which are directed toward creating utilities and acquiring wealth through the process of buying and selling of goods or services.
Such buying and selling and direct or indirect services various agencies aid in the production and distribution of commodities. Thus, business includes all activities in the arena of manufacturing, trading or merchandising, transportation, warehousing, banking and finance, insurance, promotion, etc.
Importance of business
The existence and expansion of business are justifications of the importance of business. The business provides a lot of service to the human being that highlights its significance. these services are as follows:
10 importance of business
1. Supply of goods and services: Business provides goods and services to the society. Business produces different products, which are sold or supplied to the society. The creator created and creates things, but processing, reprocessing, and prevention are done by the individuals or businesses and ultimately new utility is created.
2. Harnessing Capital and other Resources in Production: Business collects the drifts of savings from different individuals, especially through banks and financial institutions and employs those in productive activities and, thus, harnesses capital in economic activities to utilize natural resources in utility creation or value addition, and consequently, help production, employment, and resources utilization.
3. Self-employment and Provision and Employment: Business provides employment to the businessman. Further, in the production, distribution, and services of business, a large number of individuals are employed by the business organization, and income generation occurs for them and others.
4. Prevention of Natural Resources: Business creates new utility to the natural resources by prevention and value addition. Different new products are created by business operation, without which a lot of natural resources would have been wasted.
5. Research, Development, and Innovations: Business continuously makes research on the alternative uses of resources, develops new products and methods, and makes new innovations.
6. Income Generation: Business generates income for the individuals. Business utilizes factors of production like land, labor, capital and organization, and generates incomes like wage, rent, interest and profit to the factor owners.
7. Increasing National Income: Business preserves natural resources and creates new utility. Consequently, national income (NI), per capita income, (PCI), gross domestic products (GDP), etc, increase.
8. Contribution to Social Development: Business contributes to the social development also. Business growth increases national income, which contributes to social development. Profitable corporations provide a lot of money as corporate taxes in the hand of the government, which the government uses in the development activities of the country. Besides, modern corporate business contributes a lot for Corporate Social Responsibility (CSR) which ultimately enhances social welfare.
9. Contribution to the Development of Education, Science, and Technology: Business contributes toward the development of education, innovates new technology, and applies theories of science for better production and human welfare.
10. Development of International Relations: Business important necessary commodities and export new or surplus products to foreign countries. In this way, a foreign relations and develops.