What business is

Everything people do is either an economic activity (done to earn a living) or a non-economic one (done out of love, sympathy, sentiment or patriotism). Helping an old man cross the road, a mother cooking for her family, or celebrating Republic Day are non-economic: nobody expects payment.

Economic activities are of three kinds:

• Business: making or buying goods and services and selling them, regularly, to earn a profit by meeting people's needs.
• Profession: giving expert, personalised service for a fee, such as a doctor, lawyer or chartered accountant. It needs special knowledge and membership of a professional body, which makes the rules and can cancel your licence: the ICAI for chartered accountants, the Bar Council of India for lawyers.
• Employment: working for someone else (the employer) in return for a salary or wages. The employee carries little risk.

The characteristics of business:

• It is an economic activity.
• Goods are either produced or procured (an electronics shop does not make TVs; it buys them in).
• They are sold or exchanged.
• Dealings are regular.
• The motive is profit.
• The return is uncertain, so there is always risk.

Regularity matters. If you bought a phone for ₹15,000 and sold it once to someone for ₹17,000, you made ₹2,000 profit, but you are not in business. Selling phones regularly would be business. So it is the purpose and regularity of an activity that decide whether it is business.