People carry out different business activities in order to earn income. Business activities are activities which involve the provision of goods or services with an aim of earning a profit.
Activities done without the intention of making profit are referred to as non-business activities. Business activities may be grouped into the following seven categories:
This involves obtaining goods from their natural setting e.g. mining, farming, lumbering, fishing, quarrying e.t.c
- Processing-This involves the conversion of raw materials into more useful products without combining it with other goods. Examples here include milling/grinding flour, refining oil, tanning of skins and hides, conversion of iron into steel e.t.c
- Manufacturing-This involves combining different raw materials to come up with one final product. Such activities include bread baking, making a table e.t.c
- Construction-This involves building of structures such as bridges,ships,aeroplanes,houses,roads,railways e.t.c
- Distribution of goods-This refers to the activities involved in moving goods from where they are produced to where they are needed. People who carry out distribution are called distributors. Examples of distributors are wholesalers and retailers.
- Trade-Activities in this category involve the buying and selling of goods with a view of making a profit. People involved in trade are called traders.
- Provisions of services-Activities in this category involve human acts which could be mental or physical. These include activities such as hair-cutting, hair styling, car-washing, nursing, teaching, driving, and entertaining e.t.c.
NOTE: Students to give examples of activities they pay money for which are not goods.