Nature and purpose of business | Chapter 1 | Business Studies | Class 11

0:00 What's up everyone. Welcome back to the channel. This is Day Five of our 100 Days Commerce Master Class for Class 11th. And today kids, I am super duper excited because today we are going to study one of my favorite subjects. Ok? I love the different levels of the account. But business is a different kind of love, friend. Why did you take commerce? Because you want to study business. You want to become an entrepreneur. Do you want to learn what business is? Are there forms of business? In what way is the business grown? How do people make money? How are such big businessmen running their businesses? We will study all that here and I assure you that we will share so many practical and lively examples that you will develop great interest in studying and will

0:46 enjoy studying. So let's get started quickly and begin today with chapter number one. Total he will take two classes and the chapter will end. Come on, let's begin quickly. [MUSIC] So let's get started kids. But before I begin I would like to make a request to all of you. You all have come to class 11th. You all are mature enough. Don't go for memorizing at all. Ok? Don't rush to memorize it at all. Every concept is very important and everything is happening around you. All the concepts that we will study here are happening

1:33 around you. Because business is a very practical subject. But you will still make it in accountancy after some time. You will have to understand things. But what is there in business studies? You will be able to see everything around you. So understand it well and if you write it in your own language, the work will be done. So what is the name of chapter number one ? We will study about business. We will study about trade and we will study about commerce. Similarly, this book will give you complete basic knowledge about business. How many types of businesses are there? How do online businesses work these days? What are business services? What is internal business ? And what is international business? How it is done? We will study all this in a very interesting way in Business Studies. So let's start, kids. This will be our beginning. We will see this in the last. We we we yes yes yes yes yes

2:23 from here the main part is another part, there are two things, traditional and modern. Traditional Business Where did the business start in earlier times? How earlier, when there was no money, hundis used to be used. We will cover that part in the last. First let us start with the basic activities today. Ok? The first thing that comes first is how many activities you get to see. Children as humans brothers There are ultimately two things in this world. Firstly, we have capital goods. Capital goods mean machines, resources and humans. Right? So there is one physical resources and one human resources. So these humans are doing a lot of

3:09 activities. Like you are reading right now. Maybe you can play in the evening. Maybe you should go to school. It might be possible that someone is going for a bike ride just like that, normally. Someone is running. Someone is swimming. So are multiple activities happening around us? Is it happening or not happening? This human is not sitting idle. He is doing something or the other. Someone is sitting and running the reel. Someone is sitting and thinking ultimately. Someone is thinking that I should send a message of good morning, good evening. So ultimately somewhere we humans are doing a lot of activities. Every activity will be divided into two parts for the children. One would be the activities that you are doing to earn profit. If you are going to study business, then the thought of money will be going on in your mind that brother, you should make money. So whatever activities you do to earn money will be

3:55 called economic activities. And whatever activities you do, not to earn profit but for patriotism, for love of the country, out of love for me, I love my friend very much. He told me, brother, my Activa has run out of oil. Please bring petrol. I ran and got petrol for him. Did I do this to make money? No, right? Out of love, out of care, out of friendship. Is n't it? So kids, we do a lot of activities because we don’t want to make money. But we are doing it for some psychological satisfaction. We like doing that. Isn't it? So ultimately there are two activities. One is what you are doing for psychological satisfaction and the other is what you are doing to earn money. So all the activities done to earn money will be

4:42 called economic activities. And whatever activities I did not do to earn money, I did them for psychological satisfaction. I just feel that he will get involved in non-economic activities, kids. Ok? So look, the activities are divided into two parts. Economic non economic. What is economic? The activities by which people can earn their livelihood. The thing through which they can run their household and earn money is economic. What is non economic? Which are performed out of love, sympathy, sentiments, patriotism and hence are non-economic. Now you think about the business we do. Do we do business out of love? Do we do it out of sympathy or do we do business to earn money, to run the household, to take good stuff home

5:28 so that you can buy your favourite car. You can build your own nice house which has a great swimming pool, a gym , a home theatre and a nice kitchen. That's why you want to make money. And the activity done to earn money is economic. Isn't it? Like a shopkeeper is selling fruits. The doctor is examining the patient. He is charging fees for that. So there are many activities which are done to earn money. And you already see the non-economic ones. Housewife is taking care of the house, mother is taking care of the house. Now mummy brings breakfast to you and says, give it to me son, first take out ₹100. Is there a plate for ₹100 or two parathas for ₹100? Come on, take out the money quickly. This doesn't happen, right friend. Isn't it? Right? So you did charity. All this is non-economic, children. Now which business

6:16 activity will be there for children? Think. Is it a business ? So we will ask where did this business come from? From Busy. See the term business literally means being busy. It comes from the word busy. This itself means being busy. Where are you busy now? Have to be busy in economic activities. So in business we do all those activities in which we are going to earn money. Ok? Now, what are those activities? There is production of goods and services, there is purchase of goods and services, there is sale of goods and services. Brother, Ambani is also doing the same. What is Reliance doing? He is selling you stuff. Economic activity is business activity, right? So look, business is an economic activity which is concerned with providing goods and services to the society under the

7:01 incentive of profits. We will provide goods or services to the society and earn money from it. This is business. Are you alright, son? Business refers to any activity entered into with the aim of earning profits. Now what will be the characteristics of business ? What will be the features of the business? What are you going to do in business? What business does Ambani ji do? What does Adani ji do? What does Mota Bhai do for us? Children, first of all you will either do production i.e. make the goods or you will buy them readymade. Brother, I opened a bakery shop. Right next to your house. I told you everyone is around you. I opened a bakery shop or a momo shop right next to your house. So either I will make it myself or produce the goods or I will get it manufactured and will sell it to you and will get it

7:51 procured, so the businesses in the business either produce or procure goods and services, secondly business is an economic activity, nothing will be available for free brother, nothing will be available for free, if you have come to my business then bring money, goods cannot be obtained without money brother I am doing an economic activity, okay, thirdly there is sale and exchange of goods and services. What will you do after making me your brother ? If it is not sold then it has been made only for sale. So business is first of all an economic activity. Secondly, in business you will either do production or procurement and thirdly you will sell the goods. What business will happen without selling? Fourth, there is risk in this for children. Sir how is the risk? What kind of risk is there? Brother, think about it;

8:38 what is the guarantee that the goods will be sold or not ? A lot of stuff remains unsold or is it not sold at all? A lot of stuff doesn't sell at all. Isn't it? So is this a risk or not? If you have a clothes shop among many shops then what is the guarantee that all the clothes will be sold. What is the guarantee? If you have a shoe shop then all the shoes will be sold. Even if some money is left over, there could be a loss. So in business there are both things, profit or loss? This is the risk. Yes or no? So there is always a risk in business. But whoever takes the risk will get the reward. Now what does Harshad Bhai say? Have you seen the Harshad Mehta scam? You must watch Scam 1992. Kids, you must watch it. They tell every commerce student that if there is risk, it is love. If there is risk, only then will I earn something. Otherwise, what will I earn, brother? What comes after this? Uncertainty? Uncertainty means

9:25 kids, there is no certainty. Now, if a customer comes to my bakery, he should come early in the morning. If it rains today, no customer will come. Or if it is very hot, then too, kids will come only in the evening. So, the business is very uncertain. You do n't know when customers will come. You don't know if they will come or not. So, the business runs with uncertainty. Nobody knows. Okay, after that, kids, it has a characteristic that business always happens on a regular basis. Sir, give an example of this. An example of this is that Diwali came and on Diwali, we all started cleaning the house with mummy. Now, when the house was cleaned, a lot of stuff came out that we had collected just like that. We do n't use it at all. It is waste, so mother told son to sell it to a junk dealer.

10:10 Ok? Sell it to the junk dealer who comes. And with the money that you earn, you can eat chocolates and momos. Take what you want. This money is yours, go and have fun. So we did the sale here. We did sales here but is this a business? Take care children. No business is done through a single transaction. This is a normal transaction. We did it. But that doesn't mean that we became businessmen. Now Chintu is saying, Oho, I have sold the junk from today. I am a businessman. Yeh I'm gonna be a millionaire. I'm gonna be a billionaire. Did you remember Honey Singh's song ? It's not like that. Business will happen only when it is on a regular basis. When it is on regular basis. You have to do that thing over and over and over again. Now you

10:57 sold something to a junk dealer. You enjoyed it. You thought, friend, this is a great job. Now I will do the same. I will buy this item first. I will buy it for ₹20 and sell it for ₹25. ₹5 is my profit. You will do it on a simple regular basis, right? Isn't it? So look, it is written dealing in goods and services on regular basis. Profit earning with it. Business will not run without profits. Your target is to make profit. You have come only because you have to make profit. Otherwise what is the benefit of doing business? If profit is not being made. So business is first and foremost an economic activity. Then we do production in it. Do the procurement. Then we sell it. There will be risk in the business, it may be sold or it may not be sold. Isn't it? After that there is uncertainty of return. I don't know whether she will come or not. It is important to have regularity. And profit earning is my main

11:44 objective of the business. Ok? Let's quickly take a screenshot of this. Then we will move ahead. Look children, first of all it is an economic activity. Because what does it mean? Earning profits. fixed bugs? After that, production and procurement takes place. Right? Just look, if a business is carried out by providing goods to the society, then a businessman may fulfil the objective in either and both of the following ways, first of all he will either produce the goods or bring the readymade goods and then sell them, okay, thirdly sale and exchange is selling goods, just producing is not sufficient, you will have to sell the goods, isn't it perfect, brother? After this comes dealing in goods and

12:30 services on a regular basis, regular basis, children, regularity is important, one single transaction cannot be considered as a business. A single transaction will not be considered as business. Correct? Whatever I have explained to you, all those things are written in this. If you read it once, you will understand it well. Ok? What is the motive of every business – profit earning? Making a profit. What does uncertainty of return mean? Whether the sales will be less or more is uncertain. Nobody knows. And what is the last one? Element of risk. No business is risk free. There will definitely be a risk. But if there is risk then there is love. What is the matter? Now look children, we read that there are two types of human activities. Economic non

13:15 economic. Money is made in economics. Now, a person earns that money also through three types of activities. Some do business, some do employment, some do profession. Ok? That means a person can also be a businessman. A person can also be an employee. A person can also be a professional. Will make money in all three cases. But what is the difference between the three sir? What is the difference? Children, I am a normal businessman. I am a normal businessman. I am Mukesh Ambani. I am a businessman. Ok? There I work in a bank with my children. I work in a company. I teach in a school. I

14:03 am an employee. I am employed. I will get a fixed salary. Ok? Whereas I am a chartered accountant. I am a lawyer. I am a doctor. I have worked very hard to achieve this thing. I have a specific knowledge. I have a degree that not everybody has. I am a professional. Isn't it? Teachers are also professionals if they are working for themselves. Well, it is professional for school also. But there the teachers in the children's school are doing a job somewhere or the other. An employer employee relationship was formed. So whenever there is employer employee relationship, employment will be seen. Is it okay? Professionals Sir Professionals also cannot be in employment. May be. Brother, even if a chartered accountant

14:49 does a job, he too will go into employment. He will remain professional because he has a specified degree. There is specific knowledge. But at present he is also working. So he also went into employment. How is he earning money from that job? Went into employment. Isn't it? If you are doing some business there then you will become a businessman. Right? Let's see. What is business? You know it. We mainly have to see the difference between them. This is the main thing. This is the most main and most important thing that we have to read. That is correct sir. what is it sir? First of all, how will the children mode of establishment business profession employment start? When will the kids business start? When a businessman decides that I want to start.

15:37 Brother Dhirubhai Ambani decided that one day he would build a big company. Then Father Mukesh Ji joined in, Anil Ji joined in, Akash Ji joined in, Anant Ji joined in and Isha joined in. So multiple made it such a big business. Did you make it or not? So let's see when the business starts? When the entrepreneur 's decision comes. And if there is any legal formality, any license or permission has to be taken from the government, then it will be done. When will the profession start? Children, the profession will start only when you have membership of any professional body. For example, if you want to become a CA, you will have to take membership from ICAI. If you want to become a lawyer then you will have to take membership from the Bar Council. If you want to become a doctor then you will have to get membership from the Medical Council of India ( MCI). Isn't it? So

16:22 kids, you will become professional only when you have membership and secondly you also have a certificate of practice. When will employment start? When you get the Letter of Appointment or Service Agreement wherever you are employed. Right? After this comes the nature of work of children. What does the business do? Will provide goods and services. What does a professional do? Will provide professional service. Will provide personalized service. You don't get to see that normally. And what does the employer do? Whatever the contract is, he will work accordingly for whatever work he has been assigned. Isn't it? After this, children, do you need any qualification for business, that you should be a graduate only then you can do business. If this is not the case then no minimum qualification is necessary. Sir, do you want it in your profession ? Do I need a CA degree?

17:08 Absolutely needed. The doctor needs it too. Lauer should, too. The engineer needs it too. All the professionals need a degree. So here expertise and training is required in specific field. In employment, it depends where the employment is? One is in a bank, one is in a school , one is in a college. What work do I do? Or I am a helper at some shop or bakery store. So it depends, right? Qualification prescribed by the employer. What will you get in return? What will I get in return for a business? Profit. What will the professional get? Fees. What will employment get? Salary and Wages. Is it ok or not? Children? Are you understanding it perfectly? It is a must, isn't it? Let us go. Capital Investment. You have now read Capital in Accounts.

17:54 In which business should I invest money? I will have to put it in. Capital investment is essential. Isn't it? You will have to invest a little in your profession. If you are setting up your professional office initially. I'll have to buy a building, friend. So limited capital is required. Nothing in employment. He will employ you in everything. So just go and do your job. Isn't it? He bought your time. Basically there is high risk in risk business, brother. I have just come back from reading it, I don't know about the customer. Whether he came or not. It is high risk. There is some risk involved in this profession for children. The fees are generally regular. But still brother, if Covid-19 comes then there will be some problem there too. There will be some risk. There is no risk in employment here. You will definitely get your salary here. That is why people look for government jobs because there is a fixed salary. There is no tension about risk

18:41 brother. Salary has to come. Isn't it? ok sir. Transfer of Interest: Can you transfer the activity that you are doing to someone else, like, brother, the doctor is on a week's leave, he should make his neighbour sit and go ahead, brother, you give the injection, this is not possible, friend. So in professional life it is not possible, in business, it can happen that you are going out for 7 days, you leave a boy at your shop and say, brother, don't close the shop, it's a bakery, I only have to deliver biscuits, pick them up and give them to me, or whatever you want to sell, whatever you want to sell, pick them up and give them to me, so this is possible. So transfer to business is possible. Transfer from employment to employment is not possible. It is not like I am a bank manager. I have a job. I made my son after me.

19:27 Come on, from today you are a bank manager. This doesn't happen, friend. This is not possible. Ok? Code of Conduct Are there any rules and regulations? There are no such prescribed rules of business. Only professionals have them. Professional associations establish codes of conduct for their professionals. So it is compulsory to follow the professional code of conduct. What will happen in employment? In employment, the employer tells you what you have to follow. How-how do you have to follow? So there are three parts of our economic activities among these children. Business Profession & Employment. Did you understand? Easy Going? Quickly take a screenshot of it. Done? Now let me tell you some of its highlighted points. Look,

20:13 look at the profession. The professions are ultimately Doctors, Lawyers, Chartered Accountants, Architects, economic activities which require specialized knowledge. It is not that anyone will become that. Isn't it? And everything has a professional association. These people must be associated with the association. Correct? If we talk about employment, then employment means people who are getting salary or wages and who are working under someone else. Working for some organisation. Isn't it? What do we tell him? Employment. That is correct and you all have already read about the business. Business is the main thing, you have already read about it. That is correct sir. It is perfect ji So kids, this is our main topic which I had to cover today.

20:58 In the next class we will cover what are these human activities ? Correct? What are these human activities ? How does it go? In what different ways things are performed inside it. We will read these in detail and after reading them in detail, your chapter will end in a good manner. Then that history part will remain in it, it is a bit boring anyway. But I will tell you that. There is nothing special in it. But first tell me today, did you understand the meaning of business? Understand the meaning of economic activities. After economic activities, understand kinds of economic activities, business, profession and employment. Did you understand everything or not? Must. Keep doing this much. Keep the topic strong and assume around you. Please tell me

21:44 in the comment section whether your parents are in business , profession or employment. If you are in business then which business? If you are in profession then what kind of professionals are you? If you are in employment then where are you employed ? What kind of employment does he have where? Let's see how well you guys can do it. How much did you understand or not? This is very important to understand what our parents are doing. Is n't it? Let us understand this with a good example. I hope you understand. We will study this in the next class and it will be finished. Ok? Thank you so much everyone. Keep growing, keep glowing, keep smiling. [music]