parts.
First, productionis the creation of services or processing
of materials into products. Example is the conversion of iron
ore into metal car parts. Next, these products need to be moved
from the plant to the marketplace. This is known as
distribution. A car might be moved from a plant in Germany to
a car dealership in Poland. Third is the sale of goods and
services. Sale is the exchange of a product or service for
money. A car is sold to someone in exchange for money
Goods are products that people either need or want; for
example, cars can be classified as goods. Services, on the other
hand, are activities that a person or group perform for another
personor organization. For example, an auto mechanic performs
a service whenhe repairs a car. A barber renders a service when
he cuts your hair.
Business,then, is a combination of all these activities:
production, distribution, and sale. However, there is another
impotant factor, i. e., ceation of profit or economic surplus. A
major goal in the functioning of any business company is
making a profit. Profit is the money that remains after all the
expenses are paid. Creating an economic surplus or profit is,
therefore, a primary goal of business activity.
The three traditional forms of business are the sole
proprietorship, the partnership, and the corporation. The sole
proprietorship means going into business for oneself. All one
needs is some knowledge about the business, start-up capital
and knowledge of regulations. The partnership is an association
of two or more people involved in business under a written
