Business is a major economic activity concerned with the production and sale of goods and services required by people. The roots of business activities in India trace back to ancient times, where maritime routes and the Silk Route established the subcontinent as a global commercial hub, often referred to as 'Swaran Bharat' or 'Swaran Dweep'.
As economic life progressed, metals began to be used as money, leading to the development of metallic currency and documents like Hundi and Chitties to facilitate credit transactions and safe transfer of money across long distances.
| Name of Hundi | Type | Broader Classification / Details |
|---|---|---|
| Dhani-jog | Darshani | Payable to any person—no liability over who received payment. |
| Sah-jog | Darshani | Payable to a specific person, someone 'respectable'. Liability over who received payment. |
| Firman-jog | Darshani | Hundi made payable to order. |
| Dekhan-har | Darshani | Payable to the presenter or bearer. |
| Dhani-jog | Muddati | Payable to any person—no liability over who received payment, but payment over a fixed term. |
| Firman-jog | Muddati | Hundi made payable to order following a fixed term. |
| Jokhmi | Muddati | Drawn against dispatched goods. If goods lost in transit, the drawer or holder bears the costs, and the Drawee carries no liability. |
Human activities are broadly classified into Economic Activities (undertaken to earn a livelihood) and Non-Economic Activities (performed out of love, sympathy, or sentiment).
| Basic of Distinction | Business | Profession | Employment |
|---|---|---|---|
| Mode of establishment | Entrepreneur’s decision and other legal formalities, if necessary | Membership of a professional body and certificate of practice | Appointment letter and service agreement |
| Nature of work | Provision of goods and services to the public | Rendering of personalised, expert services | Performing work as per service contract or rules of service |
| Qualification | No minimum qualification is necessary | Qualifications, expertise and training in specific field as prescribed by the professional body is a must | Qualification and training as prescribed by the employer |
| Reward or return | Profit earned | Professional fee | Salary or wages |
| Capital investment | Capital investment required as per size and nature of business | Limited capital needed for establishment | No capital required |
| Risk | Profits are uncertain and irregular; risk is present | Fee is generally regular and certain; some risk | Fixed and regular pay; no or little risk |
| Transfer of interest | Transfer possible with some formalities | Not possible | Not possible |
| Code of conduct | No code of conduct is prescribed | Professional code of conduct is to be followed | Norms of behaviour laid down by the employer are to be followed |
Business activities are broadly classified into Industry and Commerce.
Industry refers to economic activities connected with the conversion of resources into useful goods.
Commerce includes Trade (buying and selling of goods) and Auxiliaries to Trade (activities that facilitate trade by removing hindrances of person, place, time, risk, finance, and information).
While earning profit is a leading objective, a business must pursue multiple objectives to survive and prosper in the long run.
Business Risk refers to the possibility of inadequate profits or even losses due to uncertainties or unexpected events.
Setting up a business enterprise requires careful consideration of several fundamental factors:
Business Case Title: Dipak Bharali and the 'Chaneki' Innovation
Corporate Context/Problem: In Sualkuchi, Assam, the slow and mentally/physically exhausting process of manual weft insertion (buta weaving) limited the productivity of silk weavers, preventing them from taking on extra work or expanding their business without buying expensive additional looms.
Strategic Action Taken: Dipak Bharali, a local weaver, designed and developed an eco-friendly, automated device called Chaneki made of recyclable materials after 80 failed attempts, which automated the weft insertion process.
Managerial Inference: Innovation and risk-taking are central to business growth. By introducing new methods, a business can dramatically increase productivity (Chaneki runs 40 times faster than manual weaving) and achieve sustainable development while satisfying multiple objectives.