Demographic Environment of Business

>> August 31, 2011

In demographic environment of business, we can include following things

1. Size of population

All these elements are relating to business. If size of population is increasing with high growth rate, demand is increased.

2. Growth rate

High growth rate of population is also tells us high rate of supply of laborers. Many companies motives to invest money in developing countries due Cheap labor power and developing market.

3. Age composition

Before producing the product, we see what age group will use this. For example, young population are interested to wear jeans but old age population are interested to wear curta and pajama.

4. Sex composition

Sex composition are two one is male and other is female. We also study the number of our customers who are female and no. of our customers are female. If female are more than male, we will care their need specially  in making of our products.

5. family size

Suppose, we are making residential rooms. For making residential rooms, we should study the number of family members who will live in it.

7. Educational level

Educational level of our customer may also affect our marketing techniques. If our customers are very educated, we can use online advertising, if they are not educated we have to use old means of advertising. 
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Natural Environment of Business

Natural environment is the group of natural resources which is used by business. Let me explain it in detail. Suppose, one business is of manufacturing. You know, from where will it get its raw material? For producing goods, manufacturing business gets all raw material from nature. All agricultural input will use in manufacturing. His machines are also made by nature's metals. His used energy is also from natural gas or diesel oil or electricity which come from nature.

In business, when we use these natural resources without any limit, natural environment changes. Global worming, floods, famines, tsunami and earth quake are its result. So, now it is the duty of business to protect this natural environment. He should support for planting more and more trees. He also stops to misuse of natural resources. After this, he can create co-ordination with nature.
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What is Abatement

>> August 27, 2011

If businessman dies before clears his dues, his liabilities  should be decreased and up to the value of his assets in case if assets are not sufficient to clears all dues. Decrease of assets will be abatement. 
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What is a fortiori analysis?

A fortiori analysis  is that business system of decision making in which we do analysis by making the list of all alternatives and best alternative is selected. 
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Forms of Business Organisations

>> August 21, 2011

Every business needs an organisation to regulate its functioning. When two or more persons work together to achieve a common objective, the division of labor takes place between them. This is the beginning of an organisation. The organisation plays a vital role in achieving the main and ancillary objective of the business.

The business units have different forms of organisations. These can be classified as follow

1. Individual or sole proprietorship

Sole proprietorship is the first stage in the evaluation of various forms of business organisation and hence the oldest one. It is the simplest and most natural form of organisation. Though, the sole proprietorship is the oldest for of organisation and many changes have taken place thereafter in the form of business ownership, yet it remain the most popular form in the modern business.

" A sole proprietorship is that form of business as the head of which stands an individual as the one who is responsible, who directs its operations and who alone runs the risk of failure."

2. Partnership firm

Partnership has two or more members each of whom is responsible for the obligation of the partnership. Each of the partners may bind the other, and assets of the partners may be taken for the debts of the partnership.

3. Joint Hindu family

Joint Hindu family or Hindu undivided family firm is a peculiar form of organisation which comes into existence by operation of Hindu law. The functioning of this form of organisation is governed by Hindu law. The hindu law comes into operation on the basis of two schools of thoughts which are as follow.

School of mitakshara

The school of mitakshara is applicable to whole of India except the state of Assam and Bengal, where the school of dayabhaga is applicable.

The Joint Hindu family firm as a form of organisation has its origin in the principles of inheritance under the mitakshara school of Hindu law. Thus, legally speaking, joint Hindu family firm exists only under the mitakshara system. All the male members of the joint Hindu family firm are known as coparceners. Their interest in the family business is called as the coparcenery interest. Thus the sons, grand sons and great grand sons become joint owners in the family property. The moment a male child borns in joint Hindu family, he becomes a joint owner to the ancestral property. Initially, a female member was not having right to the joint family property, but the amended Hindu succession act, 1956, enable the female members of the deceased coparceners family to share out of the coparcenery interest of such coparceners. However, the female members or their relatives do not enjoy the status of coparceners even after the amendment in Hindu succession act 1956.

4. Joint stock company

Company is an artificial person created by law for some common purpose, where the capital is divisible into parts, known as shares and with a limited liability.

5. Co-operative organisation

Co-operative organisation is the form of business organisation where in persons voluntarily associate together as human beings on the basis of equality for promotion of economic interest of themselves.

6. State enterprises and public utilities

Public enterprises mean state ownership and operation of industrial, agricultural, financial and commercial undertakings. 
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Types of Business Activities

Broadly, the business activities can be classified as follow:

1. Industry

Industry covers production aspect of goods. The term industry refers to the production aspect. The units engaged in producing the goods are collectively called as industry. The industry uses the raw material or semi finished goods for producing the finished goods. These goods can be industrial goods as well as consumer goods. The industrial goods are goods which are used in factories for manufacturing goods. An engineering unit manufactures the machine tools, it means the units is producing the industrial goods, because, such machines are further used for manufacturing the products. If a unit is producing butter, bread, cloth etc., it means the unit is manufacturing consumer goods, since these are consumed by consumers directly.

The industry creates the form utility in the goods. Thus, it produces the economic value. Industry requires both physical and mental efforts of human beings for creating economic values in the goods.

2. Commerce

Sale or exchange of goods and services is an essential characteristic of business. In the process of sale or exchange, goods pass through different stages till these are finally used or consumed by the customers, the last link in the chain from producer to customer. The process which fills the gap between producers and consumers is known as commerce. All activities which remove the gap between the producers and consumers  are known as commercial activities. It facilitates the distribution of goods and services among the consumers.

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Difference Between Business and Profession

Following are the main difference between business and profession.

1. Minimum qualification

→ No qualification is required to start a business.

→ A minimum technical or academic qualification is needed to join a profession.

2. Capital 

→ An adequate amount of capital is required to run the business efficiently.

→ Real capital is the competency and specialized knowledge of the profession.

3. Objective 

→ The main objective of the business is to earn profits.

→ Service first, profit second is the main objective of the profession.

4. Risk

→ There is an element of risk in the business.

→ In profession, there is minimum risk.

5. Secrecy

→ The secrecy in the business transactions is not necessary.

→ A professional must maintain the secrecy of dealings with his clients.

6. Code of Conduct

→ There is no specific code of conduct for the business.

→ There is a code of conduct for every profession for regulating their dealings.

7. Specialization

→ A businessman need not to have a specialized knowledge for starting a business

→ A professional must have a specialized knowledge in the profession which he wants to join.

8. Advertisement

→ Generally, the goods are advertised in business to increase sales.

→ Advertisement is prohibited in all the professions according to their code of conduct.

9. Criteria of Efficiency

→ Profits in business is the only criteria of efficiency.

→ Quality of service rendered is the basis of measuring the efficiency.

10. Transferability

→ One can easily transfer his interest in business to other. For example father can transfer his business to his son.

→ Profession involves the specialized knowledge which can not be transferred to any other person.

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Objective of Business

No human activity takes place without any objective. The business is also one of the most important human activity. So, it must be having its objectives i.e. economic and non economic. Basically, the business is an outcome of the social and human needs of the society. So, the social and human objectives are the main considerations of the business. To achieve these objectives, survival of the business is necessary which is not possible without profit earning, thus, the objective of the business can be categorized as follow:

1. Economic Objectives 

a) Profit earning : Risk bearing is one of the important characteristics of the business. Therefore, it is necessary to earn profits for survival of business. It is an incentive which keeps the entrepreneur busy all the time. Moreover, employees demand for higher wages and better working conditions, investors expect higher rate of return. All these requirements can not be met without adequate profits. The profits are not only necessary for survival, but these are also required for the growth and expansion of business. Thus profit earning is an important objective of business. But the rate of earning profit must be reasonable.

b)  Production of Goods : Every business activity is directed towards the satisfaction of the need and wants of the human beings. To satisfy the needs and wants of the people, the business has to produce the goods according their tastes and fashion.

2. Social Objective

If the profit earning is one of the important objectives of the business on the one hand then, on the other it should satisfy the social needs and wants i.e. by supplying good quality products at genuine price. In the modern society, business occupies a meaningful and significant place in the life of the people.

The social objectives of the business are as follow:

a) Availability of goods : The business should make the necessary goods and services available to the customers to satisfy their different needs and wants at appropriate time. This objective is so important that Govt. is also co-ordination  the business for providing the necessary goods i.e. flour etc. to the people through its public distribution system. The commerce one of the major component of business, makes the goods available to the general public by collecting these from the manufacturing places. Thus to make the goods available to the society is one of the important social objective.

3. Human Objective 

The success of the business mainly depends upon the involvement of the workers, co-operation of the consumers and financial support of the investors. Thus, it is the responsibility of the business to look after the interest of these persons.

The human objectives of the business are as under:

a) Welfare of the workers: The workers are the inseparable part of the business. They are not just the employees of the business but they put in their efforts in the formation of capital. Therefore, the business should pay attention towards the welfare of workers. They should not be considered as machines only. They should be paid wages in accordance with their labor. It has also been experienced that where the workers are provided with incentives such as bonus and additional facilities with regard to health and entertainment etc. the productivity has increased manifolds. So, it should undertake welfare programmes in order to make the workers satisfied with the working conditions. A satisfied worker is an invaluable asset to the business. Thus, it is the duty of the business to look after the welfare of the employees for its own development.

b) Consumers' satisfaction: The consumers are the sources of growth and expansion of the business. So, they should be provided with quality goods at reasonable prices. The special attention should be paid to the tastes and liking of the consumers. Many organisations of the consumers have come up under consumers protection act. The consumers have become vigilant about their rights. Thus, the business should satisfy the consumers with regard to quality, quantity and price. It will be better for the business even in the long run.

c) Satisfaction of shareholders : In the company form of organisation, the management of company should look after the interests of the shareholders i.e. the real owners of the company. The shareholders are widespread all over the country and do not know the managing director or directors of the company. They invest their money in the company on the basis of information received through prospectus and news papers etc. Thus, it is the obligation of the management to distribute fair return to the shareholders on their investments. 
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Difference between Memorandum of Association and Article of Association

>> August 19, 2011

Basis of Difference
of Association

Article of Association

It is that document of
company which shows company's objectives, company's rights and area
limitations. It is the charter of company
This is that document which shows internal rules of company. It is necessary for the management of company. It clears the rights of managers.
2. Apply the Section

Indian company law's
section 2(28) applies for making MOA.
Indian company law's section 2(2) applies for making AOA.
3. Contents

In documents, following are main contents
a) name of clause
b) registered office clause
c) objective clause
d) Liability and capital clause
There are not any fixed clauses but following contents may be increased or decreased
a) Adoption of preliminary contracts
c) No. of shares and price
d) allotment and call of shares
4. Apply doctrine Doctrine of ultravirse applies on MOA Doctrine of indoor management applies on AOA
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What is Business?

"Business is a way men make their living. It may be defined as human activity directed towards producing or acquiring wealth through buying or selling goods. It is an institution organised and operated to provide goods and services to society under the incentive of private gain."
The main emphasis of the above definitions is on exchange of goods or services for profit motive. The exchange of goods and services entail many economic activities. All these activities are to be regulated by persons.

Business, thus, involves the economic activities such as manufacturing, merchantability, financial, insurance, transportation and marketing etc.
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Features of Business

Following are main features of business

 1. Economic Activity

Business is sum of economic activities. We can say all activities in which goods are produced, purchased and sold. Social welfare activities are not included in it. 

2. Aim of Earn Profit

 It is the feature of business that all activities are done for the aim of earning profit. If we collect donation for providing services to others, it will not be business. 

3. Risk of Loss

In business, businessman takes the risk of loss of his capital. He has to face internal and outside business environment. Risk and uncertainty are the inseparable parts of business. 

4. Regular Dealing 

Regular dealing in business transaction is must for a business. An isolated transaction can not be called as a business transaction. Thus, business involves regular dealing in transaction. 

5. Freedom 

Freedom is also an important element of business. The functioning of a business is at the discretion of the entrepreneur. Functioning of a business is at the discretion of the entrepreneur. 
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Business How to Start Hotel Business (Video)

With this video, you will learn to do the business of hotel.

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How to Start Your Own T-shirt Business

If you have small money but you want to invest in very useful business, then you can start your own T-shirt Business. Youtube channel tshirtriches will teach you how can we make a design on t-shirt and how can make money from t-shirt business. Because only with customer's required design on t-shirt will increase the sale of t-shirt. Actually, there is a machine to make transferring paper design on t-shirt.

How to Make Design on T-shirt

How to Make money from T-shirt business

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How to Start Hotel Business in India

>> August 18, 2011

Hotel business is that business in which your customers come to your office. They eat the food and give money for your food and service. So, in this business, you provide both service and product. If you are interested to start your hotel business in India, my first suggestion to you is that you must open vegetarian hotel. One side, it is profitable and other side, it is also helpful for nature because it reduce global worming, water problem and balance in nature. Now study its steps

1st Step : Investment Decisions

First of your main investment is of place where you have to establish the hotel. For this, you have to decide whether you will operate hotel on own place or rented place. This decision is affected by many factors. Do you have capital to buy own place? Do you want to start this business as test? Which is most profitable according to the situation?

2nd Step : Place Related Decisions

Place should be peaceful but movement of general public should be at large scale for the successful in beginning. You can also decide to choose where there are many other hotels. It will be helpful to you to find customer more fastly without any advertising.

3rd Step : Timing Related Decisions 

Morning time is very important. You should get up early in the morning in this business because you can earn big amount from breakfast of customers.

4th Step : Purchasing of Raw Material 

You technique of buying raw material should be technical. You should not buy material at large quantity because during the recession, your raw material may be damaged.

5th Step : Facilities

It is better for you if you do MBA in hotel management. With this education, you can enhance your skills to promote this business.  
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How to Start Construction Business in India

>> August 16, 2011

If you want to start construction business in India. You should know basic things of construction business. In construction business, you have to buy land and then you make houses on it and sell to your customers. Following steps may be useful for you to start construction business in India.

1st Step : Purchasing of Land

First of all, you have to decide how much land you will use for your construction business. Minimum investment for buying land is Rs. 50,00,000 in small urban area. You should start from minimum investment to check whether this is best area of your business.

2nd Step : Planning of Construction of Houses

Now, in second step, you have to select no. of houses which will you make and sell. You can start construction of 5 and 10 residential houses.

3rd Step : Estimation of the Cost of Construction

This step is very important for starting construction business because you have to estimate each element's cost. You have to estimate the cost of all raw material, you have to estimate the cost of labor and other overheads like electricity consumption and other equipment cost.

4th Step : Estimating the Extra Cost of Wood Work, Electricity and Water Supply

Only estimation of construction cost is not sufficient. For completing the house, you have to hire carpenters for making doors and other wood work. You have to estimate their cost. You also complete electrical works and water supply. So, estimate these costs.

5th Step : Calculate the Sale Price of Houses

For calculating sale price, you have to add some margin in your total estimated cost of all houses. Now divide the sale price of all houses with no. of houses constructed. It will be sale price of your one house. Start to advertise for selling it.

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How to Start a Company

>> August 15, 2011

Companies Offices

If you want to start a business, company or corporate type organisation, it is best option for you because with this, your liability will be limited and your personal properties will not be used for payment of company's liabilities. But to start a company is not very easy task because you have to think many things for starting a company. All these things are its main steps which you should read in following lines

1st Step : Fix the Aim 

Before starting the company, you should fix your aim what will be the aim of your company. Whether it will sell products or produce. Whether it will provide services or operate on service of others. What will be your company's product. Is it suitable according to your business idea. Will it give benefit to others long time. All these things should be decided in advance.

2nd Step : Planning of Company's Business

In the planning of company's business, you should take major decisions like production planning, marketing planning and human resource planning.

3rd Step: Calculate the estimated cost of Company's project

For starting a company, you need high amount of capital for establishing production plants, marketing stores and buying machines and equipment. Good estimation of cost of project will help you to manage that money better way. If you do mistake in this step, there is big risk, your business will fail at the starting time because low amount of paid up capital will not fulfill your wrong estimation of cost of company's project. Then you will take loan at high rate of interest which will decrease your return on investment.

4th Step : Planning for Legal Incorporation

Company is association of persons which is formed and credited under company law. You have to make its planning. Whether you company will be public company or private company. Whether your company will be MNC form or domestic type. You have to register your company to registrar of companies with memorandum of association and article of association. You have to get certificate of incorporation and certificate of commencement of business.

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How to Start a Yoga Business

>> August 14, 2011

yoga class

Today, yoga has become the source of good health. Patients can save millions of dollars by doing yoga or yoga. On the other side, some young blood can start it as business. In the starting time, yoga business may be challenging for you because patients may not come because they fear from doing any wrong exercise. But, you you will start with my following steps, you will see success in the beginning of your business.

1st Step : Start from Free Yoga Classes 

You are new in the field of yoga. No one will faith on you. Never take yoga fees from any one. First one or two month give free yoga instruction to patients. If some of them will be treated from you. They will spread goodwill for you. That goodwill is real asset for you.

2nd Step : Choose Good Park

Yoga is natural way to treat the diseases. In second step, you have to choose good park where is good space. Never start it from your shop. Big place is better in this business. One more benefit of park is that you can get more customers.

3rd Step : Research New Yoga Exercise for special diseases

There are lots of poses and yoga exercises. But different are being used for different purposes. But you have to research a new pose or exercise which gives best relief. If you succeed in this, you can start to take advice fees or special training in homes. For example, I researched that If we open our hands and see sky, it is very- very helpful for back pain.

4th Step : Yoga Seminars 

Time to time, you should start yoga seminars. For this, you should pay for small advertisement. With this way, people will join with you. It is pure business and you are doing this business for the welfare of society. In this yoga seminars, you can deal with other yoga books publishers and equipment vendors. With their association, you can easily promote your yoga business.
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Steps to Write Business Plan

>> August 13, 2011

Business plan means what will you do in business? When will you start your business? How much will you invest your own capital in business? What is estimated marketing of product of your business? Main need of making business plan is to get loan for business and decrease loss. Following are main steps for making business plan.

1st Step : Make a list of different elements of business. 

a) Total amount of capital

b) Total no. or products

c) Types of products

d) Different risks

f) Level of competition

e) Expected customers

2nd Step : Explain above elements in detail 

For example, if you are saying $ 10,00,000 investment of capital. What type of capital are you investing. Whether you have collected this from limited partnership or whether you are getting it from public issue of shares.

3rd Step : Explain the Skills of Your Employees

Success of business depends on employees. In your business plan, you should explain your employees skills and experience.

4th Step : Explain Estimated Cost of Project 

What will be the cost of project? Will you do trading business or manufacturing business or construction business. Make the list with deep analysis of cost and benefit of project.

5th Step : Explain who are your consumer

In this section of business plan, you have to explain who are your consumer. What may be their age, what are their hobbies. Whether your products will satisfy their needs.

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Macro Environment of Business

>> August 12, 2011

Macro environment of business means that environment which can not be controlled by company. In this environment economic, social, political and technical environments are included. These environment powers affect not only our company or firm but these may affect whole industry. So, we can not stop of its affect. It means changing in this environment may be risky for our business.

 I can explain this in simple world. For example a MNC is doing his business from 30 years in India. It is generating high profit and providing high value to the peoples of India. It has controlled its micro environment. But Govt. now has changed and Govt. has issued order  to stop the business of that MNC because it may decrease domestic business. So, it may be very risky. So, MNC's officers should have to prepare for this. If they study macro environment of business. They can also get good idea for protecting its risk. 
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Fiscal Policy Meaning

I have already explained fiscal policy. Today, I am trying to more simplify its meaning.

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Monetary Policy in MBA

One of my online has asked me, "What should we have to explain about monetary policy in MBA?"

As student of MBA, you should explain monetary policy concept with its deep explanation. Just explaining its meaning is not sufficient answer. You have to explain recent changes in monetary policy of your country. Suppose, I am living in India and examiner expects me that I have knowledge of Repo and reverse repo rates and these days, how is RBI using this in monetary policy. You should also explains the different techniques of monetary policy. If you do not know, you can read at here
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How to Start General Store Business

One of best importance of general store business is that there is no need of  high qualification. You should know simple maths and your local language. You can start this general store business in any area.  For becoming successful in this business, you should need hard work.

1st Step : Collect the limited Capital 

For starting general store business, you need minimum capital. Now, you have to decide this minimum capital. It depends on the size your general store. If you will start to sell 10 or 20 things, you need very very small capital. You can get bank loan for starting this general store business at large scale.

2nd Step : Good Purchasing from wholesale agencies 

There are many products, you can sell in general store business. For example, you can sell kitchenware, food products, fashion products, confectionery products. One thing, you should remember that is good buying. We can tell you how can you buy these products on cheap prices. For this, you should contact good wholesale agencies in your local area.

3rd Step : How to Sell the Products in General Store Business

If you want to start general store business successfully, you should sell at very low prices. you should get only 10% margin. You should do any bargaining with customers. With this, your general store's business's goodwill increases.

4th Step : Advertise General Store Business

This is most important, we should advertise general store business through banner ads, poster ads and online ads and in local newspaper. 
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Micro Environment of Business

Micro environment of business becomes from internal part of company. This environment includes different factors which can be controlled by company. Following are the main factors of micro environment

1. Suppliers

These people supply the goods to company. We can control them, if we pay them on the time. We should also keep contacts with multiple sources because it is very less risky. If one supplier stops to supply us, we can get raw material from other supplier.

2. Customers

Customers also affect on company's business. If we do not care our customers, our customers will buy from other company. Due to this, our sale will decrease. We should make good relation with our customers.

3. Market Intermediaries

Middlemen, physical distribution firms and marketing service agencies are main market intermediaries. We should choose best market intermediaries for fast distribution of our products.

4. Competitions 

Company also have to face competition. If company has to win competition, it has to sell good quality product at lower price.

5. Public 

Public is any group that has an actual or potential interest in or impact on an organisations ability to achieve its interests. Examples are

a) Media

b) Citizen

c) Local public

If we have to make public happy, we have to protect our environment. We have to produce our products in less polluted system.

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Steps to Become a Petroleum Broker

>> August 11, 2011

Petroleum Broker is the person who contacts big petrol pumps and sell petrol to them for his clients. For this, he gets commission. He has to go to different petrol pumps for getting order. High order means high commission. So, if you have good communication skills and good record of petroleum prices, petroleum broker is good option for you. For becoming a petroleum broker, following are its main steps.

1st Step : Get MBA in marketing. During your MBA, you should strong your business environment subject. You should good knowledge of political environment because petrol prices are mostly affected with govt. decisions.

2nd Step : Get experience in petroleum companies. This experience will help you to become successful petroleum broker.

3rd Step : Start with dealing small businessmen. With this, you can get idea how to do big deal of petroleum. 
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Steps to Start a Contract Engineer Company

Business is always better field in any area. If you have recently completed your study of engineering, you can start contract engineer company. It is better option for you. A contract engineer a person who appoints persons on contract for the need of company. You can start it as company basis.

Following are its main steps

Step 1 : You should have valid degree of engineering for getting license. Only after getting license, you can start this company.

Step 2.  Now, apply for company's establishment. For this, you need some other person for making private company. For making private company of contract engineer in India, you need minimum two persons.

Step 3. After register you company in the registrar of companies, you can start your work. You can meet different other companies who are doing same work. After getting skills, you can operate your contract engineer company.

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Meaning of Business

>> August 10, 2011

Business means all activities which generates wealth. In these activities, goods are produced or purchased and then are sold on profits. Following are main features of business. 

1. Objective of business is to earn profit.
2. There are lots of risks in it.

Following are main business objectives:

1. Economic objectives

a) To earn profit

b) To Grow the business

c) Innovation of new products

2. Social objectives

a) Service to society

b) Employee satisfaction and development

c) Quality products and services

d) Fair return to investors

e) Good corporate citizenship

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