Function of Business

All the activities performed by business concerns are known as a function of the business or businessman. These business functions depend upon the nature and size of the business concern. If the business is on large scale it performs more function as compared to a concern that works on a small scale. Commonly, the main functions of a business (businessman) are as under:

1. Organization. 

The first function of the businessman is to decide about the organization of the business whether it should be a sole proprietorship, partnership firm, or a joint-stock company. He has also to decide what work should be allocated to cash workers within the organization. He has also to fix the responsibility and authority of each individual for the smooth running of the business.

2. Planning. 

Planning is a very important function of a business concern. For the success of the business, first of all, future targets are fixed and then plans are made and budgets are prepared to achieve these targets. So the proper planning is the key to the succession of the business and is an essential function of a businessman.

3. Financing.

Finance works like blood in the business. So the businessman has to provide funds in order to meet the financial needs of the business concern. When internal funds are insufficient, then the business has to get loans from the financial institutions in order to meet the current as well as future needs of the business concern.

4. Production Function.

If the business concern is a manufacturing one then its main and important function is the production of goods and services for the satisfaction of human wants. In production function, raw material is converted into finished or intermediate goods and that is sold for a price to earn profit.

5. Purchasing Function.

When the business concern is a trading concern, it purchases the finished goods and sells them its profit. But when it is a manufacturing one. It has to purchase the raw material in order to convert it into finished or semi-finished goods. In this way, purchasing is also an essential function of a business concern.

6. Warehousing.

Now a day as the goods is produced on large scale and that is not sold on the same day. The producer has to store it for some time in order to save it from destruction and to get the required amount of profit. So, warehousing is also an essential function of a business concern. 

7. Transportation.

Now a day, goods are produced on large scale and that are sold in the scattered market, which may heat a large distance from the point of production. So the business has to arrange for the transportation facilities to bring the raw material into the factory and the finished goods from the factory to the sales point. In this way, transportation is also a function of the business concern.

8. Advertising.

Until the consumers get aware of the benefits of the goods, they will not purchase them. So advertising is the only mean by which goods are introduced to the general public. For this purpose, different media of advertising like radio, television, newspaper signboards, periodicals and posters are used by the sellers to introduce their product and become an important function of a business.

9. Insurance.

In business, there is a risk of different types of losses during production, storage, and transportation of the good, etc. So in order to shift these losses to others, the businessman purchases insurance policies for goods, buildings, and for other assets of the business. In this way, insurance is also an important function of a business.

10. Marketing Function.

Marketing is a very important function of every business concern, if it is a trading concern, first it purchases the goods and then sells them at a profit. But when it is manufacturing one, first it converts the raw material into finished on semi-finished goods and then it is sold for profit motive. So, the sale of goods and services is the main source of income for every business concern. 

11. Accounting.

The main objective of the business is to earn profit. In order to know whether the business has warned profit or is going into loss, a businessman has to record every transaction of the business in money terms. This job of recording business transactions is done through accounting. So accounting is also an essential function of a business concern.

12. Personnel Function.

A businessman alone cannot perform all the business activities. He has to employ so many persons to perform different business activities. So the establishment or personnel department of the business concern is responsible for the recruitment training and payrolls of the employees. If there is a good relationship between the employers and trade unions of the employees, it means that the personnel function is being performed successfully.

13. Research.

Now a day, there is stiff competition in the business world. Only those firms can stay in the market, which modifies their products according to the changing requirements of the market. So, it is the research function of the business by which new innovations are made and technical and scientific rules are applied keeping in view the changing circumstances for the advancement of the business