Business can be defined as financial functions for the purpose of gaining profit. Here the financial functions mean financial transaction between two or more persons. Here the transactions are the transfer of goods or services.
According to Joseph T. Straub and Raymond F. Attner, "Business is an enterprise engaged in producing goods and services to make profit".
All financial activities are not business. To be a business, there must be a purpose of gaining profit.The key points of these definition of business are -
- A financial activity;
- An organization;
- A purpose of making profit.
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Example:
a) A man had a garden of mango. He had a lot of mango trees. During the season, he collected a huge amount of mangoes from his garden. Then he gave all mangoes to every house within his village.
b) The man collected again a lot of mangoes from his garden on the next year. Then he went to the market and sold them to the people. Thus he made a profit by selling the mangoes.
From the two examples, we can say that example (a) is not business, because here there is no way of making a profit. But in example (b) is a business, because here there is a way of making a profit.