 Business is a regular process of earning a profit by satisfying consumer’s

needs through the manufacturing of goods, reselling of products, providing

services or carrying out all three together. It is an occupation which requires
a particular set of skills and expertise to derive maximum profit out of it.

 Business is derived from ‘busy-ness,’ i.e., keeping oneself occupied with

one or the other work, but it is much more than just being busy.
 To have a better understanding of what a business is, we must go through
the following points:

1. Regular Process- It is an activity 6. Risk- All businesses have a risk

which is performed repeatedly to
generate profit.
2. Economic Activity- The whole sole
purpose is maximizing wealth.
factor or uncertainties of failure and
loss.
7. Profit Earning Motive- The initial
motive of a businessman is making a
profit out of his venture.
 The previous instance has made it clear that business involves goods or
services or both. A person has first to select the kind of business line he
wants to operate.
 Thus, a business can be broadly classified as into the following types:

 An activity performed to earn money through customer satisfaction is

known as a service. It involves professional skills and expertise.
Example: A professional teacher earns money by taking tuition class.

 Making profit through production or creation of goods from raw

material in such a way that it derives some utility to the consumer is
known as a manufacturing business.
Example: Processing of sugarcane in a sugar mill to get fine sugar.

 Merchandising means procurement of goods from manufacturers or

wholesalers, at a low price and selling it at a higher price to make a
profit. It is also known as a retail business.
Example: A florist selling flowers

 A service provider is an individual or entity that provides services to

another party. The provision of services between a service provider and
a company is typically governed by a service agreement.
 Examples of potential service providers for a company are advisors,
individual consultants, law firms, design shops and investment banks.

 Sub-contracting is the practice of assigning, or outsourcing, part of the

obligations and tasks under a contract to another party known as a
subcontractor.
 Subcontracting is especially prevalent in areas where complex projects
are the norm, such as construction and information technology.
Subcontractors are hired by the project's general contractor, who
continues to have overall responsibility for project completion and
execution within its stipulated parameters and deadlines. This can
create a subcontractor risk for compliance.
 Subcontracting is probably most prevalent in the construction industry,
where builders often subcontract plumbing, electrical work, drywall,
painting, and other tasks.

 Franchising is a form of marketing and distribution in which the owner

of a business system (the franchisor) grants to an individual or group of
individuals (the franchisee) the right to run a business selling a product
or providing a service using the franchisor's business system.
Franchisees are also given permission to use the franchisor's branding,
trademarks, and identifying marks under specified guidelines. It is
important for anyone deciding to start a business by becoming a
franchisee to remember that in franchising the franchisee is bound to a
partnership agreement with the franchisor for a defined period of time
(some exceptions do exist).
 Examples of well-known franchise business models include:
o McDonald's (NYSE: MCD)
o Subway
 o United Parcel Service (NYSE: UPS)
o H. & R. Block (NYSE: HRB)
 Multilevel marketing (MLM) is a strategy some direct sales companies

use to encourage existing distributors to recruit new distributors who

are paid a percentage of their recruits' sales. The recruits are the
distributor's "downline." Distributors also make money through direct
sales of products to customers. Amway, which sells health, beauty, and
home care products, is an example of a well-known direct sales
company that uses multilevel marketing.
 Multilevel marketing is a legitimate business strategy, though it is
controversial. One problem is pyramid schemes that use money from
new recruits to pay people at the top rather than those who perform the
work. These schemes involve taking advantage of people by pretending
to be engaged in legitimate multilevel or network marketing. You can
spot pyramid schemes by their greater focus on recruitment than on
product sales.
Examples:
o Avon.
o Herbalife.
o Mary Kay.
o National Safety Associates (NSA) / Juice Plus.
o The Pampered Chef.
o Primerica.
o Tupperware.
o World Financial Group (WFG)
 E-commerce, also known as electronic commerce or internet

commerce, refers to the buying and selling of goods or services

 using the internet, and the transfer of money and data to execute
these transactions. Ecommerce is often used to refer to the sale of
physical products online, but it can also describe any kind of
commercial transaction that is facilitated through the internet.
 Whereas e-business refers to all aspects of operating an online
business, ecommerce refers specifically to the transaction of goods
and services.
 Ecommerce can take on a variety of forms involving different
transactional relationships between businesses and consumers, as
well as different objects being exchanged as part of these
transactions.

1. Retail- it is the sale of a product by a business directly to a customer

without any intermediary.
2. Wholesale- it is the sale of products in bulk, often to a retailer that then
sells them directly to consumers.
3. Dropshipping- it is the sale of a product, which is manufactured and
shipped to the consumer by a third party.
4. Crowdfunding- it is the collection of money from consumers in
advance of a product being available in order to raise the startup capital
necessary to bring it to market.
5. Subscription- it is the automatic recurring purchase of a product or
service on a regular basis until the subscriber chooses to cancel.
6. Physical products- Any tangible good that requires inventory to be
replenished and orders to be physically shipped to customers as sales are
made.
7. Digital products- downloadable digital goods, templates, and courses,
or media that must be purchased for consumption or licensed for use.
8. Services- skill or set of skills provided in exchange for compensation.
The service provider’s time can be purchased for a fee.

 In the present scenario, most of the people in search of becoming

independent and create their own identity are opening startups.
Though many of them fail, the ones with a proper business strategy
and excellence in their operations tend to succeed.
 Business is all about deriving profit out of selling goods and services
ethically.
 The risk is an integral part of any business, but taking the right
decision at the right time is all that you need to achieve your
business goals.

 https://www.investopedia.com/terms/f/franchisee.asp#:~:text=Examples
%20of%20well%2Dknown%20franchise,a%20wide%20variety%20of
%20industries.
 https://www.referenceforbusiness.com/small/Sm-
Z/Subcontracting.html#:~:text=Many%20small%20businesses%20hire
%20subcontractors,to%20handle%20a%20special%20project.
 https://www.marketing-schools.org/types-of-marketing/multi-level-
marketing/
 https://www.investopedia.com/terms/m/multi-level-marketing.asp
 https://www.shopify.com/encyclopedia/what-is-ecommerce
 https://www.investopedia.com/terms/s/subcontracting.asp
 https://www.investopedia.com/terms/s/subcontracting.asp
 https://www.cooleygo.com/glossary/service-provider/