Business activities are classified into two categories:-

1.Industry:-
Industry refers to an activity that converts raw material into a useful product. Industry includes activities
related to production and processing as well as activities related to the rearing and reproduction of animals
or other living species.

2.Commerce:-
Commerce refers to all those activities which help directly or indirectly in the distribution of goods to the
ultimate consumer. There will be no use in producing goods unless and until these goods reach the ultimate
consumer. Goods are produced in one place and consumers are scattered at different places. The consumers
are not aware of what kind of goods are produced by the manufacturer. Goods are produced in a large
quantity and demanded by consumers in a small quantity. All these problems i.e. the hindrances of place,
hindrances of knowledge, hindrances of storage, etc are solved by commerce.