We live in a world where everything is surrounded by business. Everything you eat or wear or the product you use is produced, distributed or sold by a business organization. Like hunger? Eat pizza or fried chicken or produce pizza hut or KFC, but at the end of the day it is a business organization. Or the bank and the company that chose to save money. Every morning, at your breakfast table, let’s see a small sample of the number of businesses involved with the bread you’re getting. Farmer buys no flour, buys wheat produced Flour mill company. This wheat may be used by a specialized transport company. The flour maker is selling its products to an unemployed production company. The unemployed producer is making flour made from flour made from biscuits or bread products. They may be selling their bread or biscuits at your grocery store or confectionery next to your home or sometimes directly to you. The bread they produce is so hand-rolled around your breakfast table. If you dig deeper, you may find many other hidden or hidden trades.
Business and Product Exchange ( Business and Barter)
In ancient times, one product was exchanged for another. Suppose the rice grower exchanged the rice with the rice produced by the cultivator. This is called a barter of goods. Barter was not involved in the profit motive. And this is where business is different from commodity exchange. Profitability and risk are very closely linked to business. In the example of the bread that I gave a little while ago, analyzing each party will show that everyone is producing their product, Adds profits to purchase and incidental expenses and then sells to the other party. This profitability is what separates the business from the commodity exchange. Let’s see how the threat is involved. Think of a farmer’s product that may or may not be sold. Or what if the bread from the grower was not sold? The profits would not have come, but the products produced by spending their own money might have been animal feed. Because of this threat, Allah Almighty has made the business lawful and prohibited interest.
What is business in the language of the book: Business is the business of people who engage in production, distribution and its subsidiary legitimate economic activities in order to make a profit to meet its scarcity .
Yes, it is a legitimate economic activity. And because of this, the drug dealer or drug smuggler does not fall into the business of buying and selling goods.
Goods and service producing firms or companies producing goods and services
Business organizations do not produce goods or produce services. Goods producing or producing goods are those organizations that produce products that have visible physical presence. Such as food production companies or clothing producing companies. The physical presence here means that every product you can see with your eyes, touch and feel with your hands. For example, Punjabi or kimiz or jeans have physical presence. You can show that it is Punjabi, it is jeans pants and so on.
The service provider, on the other hand, performs service delivery, actions that benefit the consumer in general. There is no physical presence of these services. For example, you cannot show to anyone that it is a haircut or a touch of the hands and feel of the service provided by the insurance company.
The role of Profit or profit Role
The important thing that we get from the music of a business is whether the product or the service, whether it is a product or a product, is the profit. The profitability of a business is the difference between the total income of the business or the total production cost, operating expenses and tax with the sales money available. Profit is the ultimate goal of the business. No matter what you say on the face of it all, the purpose of serving our people is to take profit from the business, with the intention of making a profit in the blah blah blah.
Today, so much of the beginning of the beginning. In the next lecture we will discuss the factors of production or what are the producers of production, the different types of economic systems, why we study business.