Difference between Commerce and Business
- mansigoyal | Sat Mar 13 2021
Fascinated by the words “Commerce” and “Business”, I decided to pursue Commerce in 11th grade. The terms sound similar to an amateur. I would like to share my firsthand experience at the very first lecture of the new learning. My teacher asked, “You and your friend purchased a property and sold it at a profit of Rs.10000. Is it business?” Out of 40+ students, a startled naive student answered, “Yes, it is a business because there is sale and purchase of a good which results in a profit”. Trade is the buying and selling of goods and services. Commerce includes all the activities which facilitate the exchange of goods and services such as transportation, advertising, banking, insurance, warehousing and so on. Therefore, Commerce paramounts to the buying and selling part of business and all the activities for successful flow of it. Trade is a part of the term commerce. For a deeper insight, a good can be described as anything offered in the market for masses to satisfy their needs. The part to be taken note of, is that it includes only the final product to the customer and not the intermediate ones to be processed further. This is merely due to the fact that the value of a final good includes all the intermediate costs. This helps to avoid double counting in the economy. Services are intangible in nature with no physical goods being transferred. Services are provided to the customers according to their needs and the skills, resources and experience posed by the service provider. Business is the activity by any entity to make a living and includes commerce along with major activities such as planning, marketing, trading, accounting, finance, manufacturing, sales, research and development, management and many more. Hence, business is an economic legal activity concerned with trading of goods and services with a motive to earn profits, considering the risk factors, on a regular basis. My teacher responded to the yes and said, “It is not business though considered with buying and selling because it is a one time transaction rather on a regular basis. As a result, it cannot be termed as Business. Business is a much wider term which includes both Trade and Commerce. The amount invested in the business is coined as capital to carry on its operations. The business can take several forms depending on its structure such as Sole Proprietorship, Hindu Undivided Family business, Partnership, Cooperative Societies and The Company. The later three can be further divided into sub categories on various grounds. To sum up, Business includes both trade and commerce. Each of the three hold indispensible importance in our economy.