COMMERCIAL ACTIVITIES UNDERTAKEN BY INDUSTRIALISTS
How industrialists engage in commerce?
All those, then who produce raw materials or who make goods are employed in industry, whereas those who buy, or sell or distribute them, or who facilitate their purchase, sale or distribution, are employed in commerce.
In buying raw materials from a producer, in storing them and the finished goods, and in selling and transporting the finished goods to a wholesaler industrialist is engegaging in commerce.
In paying the producer for the raw materials by cheque and in accepting a cheque from the wholesaler for the finished goods he avails himself of the commercial services rendered by banks.
Finally, in insuring his land and buildings, his plant and machinery, and his stock against damage or loss by fire, theft, burglary, etc, he avails himself of the commercial services rendered by insurance companies.
COMMERCE AND BUSINESS
BUSINESS
Business refers to any activity conducted with an aim of making a PROFIT while standing a risk of loss. OR
Business is the sum total of all human activities that result in creation and possession of goods and services desired by society under the incentive of private gain.
Business consists of a vast number of activities or operations aiming at earning PROFIT and such activities rise from various social economic sectors as insurance, banking, transportation, communication, direct services, mining, building, processing, import and export, wholesale and retail trade. Business includes industry, commerce and services that create form, place, time and possession utilities.
COMMERCE
Commerce applies to activities related to TRADE AND AIDS TO TRADE only.
All those engaged in commerce are businessmen but not all engaged in business are necessarily commercial people e.g. a manufacturer is a businessman but is not engaged in commerce. A wholesaler is engaged both in commerce and business.
DIFFERENCES BETWEEN COMMERCE AND BUSINESS
-Business consists of all industrial, commercial and service occupations while commerce consists only commercial occupations-Trade and aids to trade.
SIMIZALITIES OF COMMERCE AND BUSINESS
-Both commerce and business aim at generating profit.
-Both commerce and business creates form, place, time, ownership and possession utilities.
-Both commerce and business are facing risks.
FEATURES OF BUSINESS
-It deals in the exchange of goods and services.
-Profit is a driving force for doing the business.
-It is involved in risks e.g. theft, fire etc.
-Series of profitable transactions through buying and selling of goods and services.
-Production or marketing of goods for value.
-It is aimed at improving better standard of living.
-It implies harnessing of resources-natural and material in combination with labour and capital for producing the goods.
FACTORS TO BE CONSIDERED FOR ESTABLISHMENT OF NEW BUSINESS
In order to start and run the business successfully the following factors must be considered carefully;
1) BUSINESS KNOWLEDGE
A prospective business proprietor is required to possess some knowledge about the nature of business intended to be established. The potential knowledge can be acquired through studying, sharing experience with successful businessmen, and seeking advice from experienced people.
2) NATURE OF BUSINESS
Prospective business proprietor should first decide what type of business to start can generate him profits. This is possible through having considerable knowledge, experience and foresight.
3) BUSINESS CAPITAL
There must be a reasonable amount of resources to start the business in terms of money.
4) FORM OF BUSINESS OWNERSHIP
A prospective business proprietor should consider to start a business in a form among sole proprietorship, partnership or a limited company by observing their weight of advantages and disadvantages.
5) BUSINESS LOCATION
A prospective business proprietor should decide where his business should be located. The potential business location should be convenient for customers with availability of commercial services such as banks, insurance, transport etc.
QUALITIES OF BUSINESSMAN
The businessman should have the following qualities;
-He should have ability to plan and organize the business.
-He should be industrious i.e. hardworking.
-He should manage well the finance.
-He should have personal qualities of self-confidence, self-control, honest etc.
-He should work in teamwork with his workers.
-He should have business skills in running well e.g. in marketing, finance, research etc.
-He should be firm, steadfast and courage.
-He should be ethical in running the business through earning the legitimate profit.