Comparison of Business
Profession & Employment
Business – Profession - Employ
1 Mode of establishment
Business Profession Employment
Based on Membership of Appointment
entrepreneur's professional Order
Decision body
Nature of work
Profession Employment
Business
Employme Performing
Providing goods and Rendering work as per
services to the public personalized service
expert services contract
Qualification
Business Profession Employment
Prescribed As prescribed
No minimum qualification by the
qualification and training employer
Reward of return
Profession Employment
Business
Salary or Wage
Profit Fees
Capital investment
Business Profession
Large capital Limited capital
based on the Employment
size of
business
No Capital
Transfer of interest
Business
Employment
Profession
Not
Transferable Not
Transferable
Transferable
Examples:
Business
Profession Employment
CA, Legal,
Shop, Jobs in banks,
Medical
Factory etc. insurance,
Profession etc
Govt.
departments etc.
Comparison: Business, Profession and Employment
Basics Business Profession Employment
1 Mode of Establishment Entrepreneur’s decision and legal formalities Membership of a professional body Contract of employment
Providing goods and services to the public Rendering personalized and expert
2 Nature of work service As per the contract
Prescribed qualification by the
3 Qualification No minimum qualification professional body Prescribed by the employer
4 Reward or return Profit Fees Salary or wages
5 Capital Investment High Limited No capital
Basics Business Profession Employment
6 Risk High Limited risk Little risk
7 Transfer of interest Possible Not possible Not possible
8 Code of conduct Not prescribed Prescribed by the professional Laid down by the employer
body
Jobs in banks, insurance, govt.
9 Examples Shop, Factory etc. CA, Legal, Medical Profession etc. departments etc.
Classification of Business Activities
Industry Commerce
Classification of Business Activities
Classification of Business
Classification of Business Activities
Industry refers to that part of business which is concerned
Industry
with the production of goods
Industry
An industry may be classified into primary industry,
secondary industry and tertiary industry
Types of Industries
Types of Industries
Primary
Industry Engaged in extracting, producing and
processing of natural resources
Eg: Extractive industries
and genetic industries
Classification of Primary Industries
Classification of Primary Industries
Extractive They are engaged in the extraction (collection) of
Industries
useful materials from the
earth and sea
Eg: Mining, fishing, agriculture, quarrying etc.
Extractive
Industries
Extractive Industries
The products of these industries are either
directly consumed or used as raw
materials by other industries
Coal
Classification of Primary Industries
Genetic
Industries Engaged in the reproduction or
multiplication of plants and animals
Genetic Industries
E.g. Plant nurseries, Poultry farms, cattle breeding farms etc.
Classification of Primary Industries
Secondary
Industries They are concerned with the materials which
have already been produced at the primary stage
Eg: Manufacturing industries and Construction industries
Classification of Secondary Industries
Classification of Secondary Industries
Manufacturing Industries
Manufacturing
Industries
Engaged with the conversion of raw
materials into finished goods
E.g: Cotton into textiles, timber into furniture etc
Classification of Secondary Industries
They change the form of goods i.e. raw material into
Manufacturing finished goods and thus create form utility
Industries
Raw Materials for Cement
Classification of Secondary Industries
They produce Consumer Goods, Industrial Goods and Capital
Goods
Manufacturing
Industries
1 Analytical Industries
Analyses and separates different
elements from the same
materials
Types of Manufacturing Industries
2
Synthetical Industries
Combines various ingredients into a new product
Eg: Cement is produced from Lime, Silica,
Magnesia etc.
3
Processing Industries
It involves successive stages for
manufacturing finished products
Eg: Sugar, Paper etc
4 Assembling Industries
Assembles different component parts to make a new product
Eg: Car, T V, Computer, Mobile Phone etc.
Construction
Industries
Engaged in the construction of buildings, dams, roads, bridges etc.
They use the products of manufacturing
industries and extractive industries
They are providing support services to primary and secondary
Tertiary industries and it form part of commerce
Industries
Insurance
Eg: All service activities which are auxiliaries to trade like
transport, banking, insurance etc.
Commerce
Commerce
It is concerned with buying, selling and distribution of
commodities and it is an organized system for exchange of
goods and services in between the businessman and the
customers
Commerce
It is also concerned with the marketing aspects of business,
i.e. supply of right type of goods to the right persons, at the
right time and at the
right price
Commerce includes trade and aids to trade
Commerce
Functions of Commerce
Functions of Commerce
Functions of Commerce
Functions of Commerce
Functions of Commerce
This problem can be solved by warehousing
Functions of Commerce
Advertising helps in the removal of hindrance of knowledge
among the buyers
Functions of Commerce
Trade
customers
Entrepot
Importing goods from one country for the purpose of
exporting them to some other countries
Aids to Trade
(Auxiliaries to Trade)
Objectives of Business
Business Risk
Nature of Business Risk
2
It is an essential part of every business
Every business has its own risks, no business can avoid risk
Risk can be minimized but cannot be eliminated
4
Profit is the reward for bearing risk
An entrepreneur takes risks under the expectation of higher
No risk means
no gain
Methods of dealing with
Risk
Causes of Business Risk