It is one of the most important auxiliaries to trade. Transportation helps trade by facilitating the movement of goods and passengers from one place to another. Transport creates ‘place utility’ of the goods and remove the problem of distance. All kinds of goods can be transported in large quantities over long distances.
A business can depend upon a number of modes of transportation - land transport (road, railways, and pipeline), water transport (inland waterways,coastal and sea) and air transport (domestic and international).
Communication :
Now-a-days it is not possible to have business without communication.Communication implies transmission of information, ideas, opinions, etc between two or more persons. It is a systematic and continuing process of telling, listening and understanding. Communication may be of two types - (i) internal and (ii) external. Internal communication refers to transmission of information by a person to another of the same organisation. External communication refers to transmission of information by persons to others outside the organisation. Methods of communication may include face to face, by telephone, postal mail, etc. On the basis of means of communication, there are two types of communication –oral and written.
Banking and Finance
Banking provides safe, efficient and convenient mode of payment for goods in inland trade as well as in foreign trade. Banking helps business firms to overcome the problem of finance by lending money as and when required. Banks accept deposits and lend money. The other services of banks are: discounting of bills, collection of cheques, acting as agent. A bank accepts deposits on various accounts such as fixed deposit, savings, recurring deposit, and current. Loans are granted through over-draft, cash credit, loans and advances, discounting of bills. Other services of banks include collection of payments on cheques, bills, drafts etc., sending money from one place to another, buying and selling securities, payment of insurance premium, issuing travellers cheques, providing locker system, and providing information on credit worhtiness. Banks are of various types: commercial, agricultural, indigenous, rural, cooperative, exchange, central, etc. In fact banking is the lifeline of business.
Finance:
Finance is the life blood of business. It implies provision of money at the time it is required by business. Provision of funds is essential for every type of trade. Finance needed by business is called “Business Finance”. It means arrangement of cash and credit to carry out business activities.Types of finance required by business are long–term, medium–term and
short–term. Long–term finance (more than 10 years) is required for buying fixed assets; medium–term finance (one to 10 years) is required for modernization and expansion of business, and short-term finance (upto one year) is needed for working capital. Sources of finance may be owned funds and borrowed funds. Special financial institutions which provide finance to business are IFCI, SFCs, ICICI, IDBI, SIDBI, and IRBI. They provide long-term and medium-term finance.Warehousing
Warehousing refers to storage of goods which are generally produced on a large scale in anticipation of demand. Goods have to be stored for some time before transportation by manufacturers, wholesalers and retailers.Thus warehousing creates ‘time utility’.
Insurance
Insurance occupies a prominent and valuable place as an aid to business and commerce. Insurance provides security against risks. It makes trade and business secure by making provision against all probable losses. Insurance is based on the principle of ‘pooling of risks’. Insurance helps the businessman to conduct his business with confidence and peace of mind.There are two major types of insurance coverage - (i) insurance of life of
people and (ii) insurance of property