3) Innovations

Innovations:

The business of today is all the time busy in making improvements by introducing new products, for example, credit card, digital diary, mobile phone etc. It is also introducing new methods
of distribution, for example , e-commerce , teleshoping. It is also using new materials of production of goods such as transistors instead of vacuum tubes, CNC instead of petrol. All these innovations in production bring improvements in the quality of products and reduce costs.

4) Fast Means of Communication and Transport

Fast Means of Communication and Transport:

The fast developed means of communication and transport these days are helping the traders in providing goods to the costumers at the right time, right place and right price. These aids to trade have helped in the expansion of business.

5) Provision of Credit by Banks

Provision of Credit by Banks:

In the modern world, the commercial banks and other specialized credit institutions are providing credit to the agriculturists, traders and manufacturers for producing goods and doing bsinesson large scale

6) Insurance

Insurance:

The various types of business risks which may happen due to fire, theft, flood, earthquak, strikes etc. can be insured and the loss if any arising out of the risks can be recovered. Insurance has given stability to the business now which in the earlier days was not available.

7) Employment

Employment:

Business of today has generated employment both in the rural and urban areas on a bigger scale.

8) Source of Revenue

Source of Revenue:

Business of today is providing revenue to the state with which the government maintains law and order, undertakes defence and carries on welfare and development activities.

9) Urbanization

Urbanization:

As business is expanding, it is helping in urbanization. The growth of cities has changed the social life of man. His vision has been broadened. Education facilities have increased.

BUSINESS RISK & CAUSES OF BUSINESS RISK

What is Business Risk:

Business is mainly run to earn profit. However, there is always a chance of suffering loss in it. This danger of loss from unforeseenable events in future in business is name as business risk. Business risk is an essential element of business. it cannot be avoided but it can be minimized by taking timely suitable measures by the businessman. The main causes of business risk in brief are as under.

1) Natural Factor

Natural Factor:

There are certain natural factors like earthquake, floods, famine hailstorm etc. Which cause damage to business. Since human beings have no control over nature, therefore, the loss caused to business due to natural causes is unavoidable.

2) Change in Government Policy

Change in Government Policy:

If there is a sudden shift in monetary and "fiscal policies of the government, it may lead to loss business.

3) Use of Modern Techniques of Production

Use of Modern Techniques of Production:

If the manufactures set up heavy machinery and being to use modern techniques of production, which lower per unit cost of production of goods, the small business units producing similar goods will suffer losses as they will not be able to introduce heavy machinery.

PROBLEMS BEFORE ESTABLISHING A NEW BUSINESS

By establishing a business means to start a new bsiness. Before the industrial revolution, the goods were generally produced for local markets. If was, therefore, easy to establish and operate the business. The conditions are now entirely changed. The goods are produced by machines. The rate of production has gone up. There is stiff competition for the sale of goods in the market. Goods are produced in inticipation of demand. The risk in business has increased manifold. The entrepreneur, therefore, has to be very careful before undertaking any new business. The main factors are problems which are to be examined before establishing a new business are as follows.

1) Selection of Business

Selection of Business:

The most important decision before engaging one-self in any bsiness activity in the selection of business. Once a decision is taken in a business is established, it then becomes difficult to change it, So detail investigations and utmost care should be taken up in the selection of business.

2) Provision of Capital

 Provision of Capital:

Capital is life blood of business. Before starting a business, the capital needs of the business is to be assessed. The capital needs depend upon its fixed and working capital requirements. After considering the financial requirements, the sources for raising funds for the business should be taken up. In case the full amount of capital for establishing and operating business cannot be met from owned capital, (own resources then arrangements shall have to be made for raising of borrowed capital from banks, friends etc.

3) Location

 Location :

The selection of a suitable place for the establishment of a business is of utmost importance for the success of a business. The availability of raw material, trained labour, banking facilities, telephone, gas, cheap transport, nearness to market for finished products etc, are the important considerations in the selection of site for business.

4) Fulfillment of Legal Requirements

Fulfillment of Legal Requirements:

An entrepreneur before starting a business has to fulfill the conditions and rules enforced by the state, if any. The non fulfillment of legal requirement may send him to jail.

MAIN SOCIAL RESPONSIBILITIES OF BUSINESS TO SOCIETY

According to Henry Ford, the economic objective of business is no doubt to earn maximum profit but this philosophy is undergoing a change as the years pass. The business is now required to produce more and more quality goods for more and more people and at lower and lower prices. In addition to this the business has to shoulder the social responsibilities.

For human betterment the bussiness is to be organized in such a way that it also leads to human betterment. Thus self interset of earning profit and promotion of human will being should go together in business. The main obligations of business in brief are"

(A). Obligations to itself

 Obligations to itself:

                    (i) Planing the business with foresight and honesty.
                    (ii) Earning reasonable profit through lawful means.
                    (iii) Keeping steady expantion and growth of business.
                    (iv) Serving the society with vigour and zeal.

(B). To the share holders:

 To the share holders:

                    (i) Fair and judicious use of capital.
                    (ii) Payment of proper dividends.
                    (iii) Holding annual meetings with the share holders.

(C). To the employees

To the employees:

                    (i) Fare remuneration.
                    (ii) Treating workers as human beings.
                    (iii) Providing healthy work environment.
                    (iv) Developing the skills of workers through proper education and training.
                    (v) Provision of retirement benefits.
                    (vi) Proper motivation of the employees.

(D). To the suppliers of input

 To the suppliers of input:

                    (i) Prompt payment.
                    (ii) No undue decrimination among suppliers.
                    (iii) No harassment.

(E). To the customers

 To the customers:

                    (i) Provision of goods in adequate quantity.
                    (ii) Maintaining the standard and quality of goods.
                    (iii) Charging reasonable prices.
                    (iv) Attending complaints of the customers promptly.
                    (v) Bringing new and better products through research.

(F). To the government

 To the government:

                    (i) Payment of due taxes.
                    (ii) Observing the rules enforced by the state from time to time.
                    (iii) Donations community development.
                    (iv) Following the objects and ideals of the state.
                    (v) Supporting and strengthening the free enterprise system.

(G). To the neighbourhood

 To the neighbourhood:

                    (i) Must not pollute air and water.
                    (ii) Should not mis use the local infrastructure.
                    (iii) Maintain friendly relations.
                    (iv) Contributing liberally to the uplift of the locality particularly in welfare institutions.