Major differences between Business Profession and Employment
Various activities people undertake to satisfy their needs can be broadly classified into two groups namely economic and non-economic activities. Activities by which we can earn our livelihood are economic activities and whereas non-economic activities are those performed out of love, sympathy, sentiments, etc. Three major categories in Economic activities are:
- Profession and
Business refers to an economic activity in which people regularly engages in production or purchase of goods for sale, or exchange of goods or supply of services to satisfy the needs of other people with an ultimate motive to earn profits. The word business is derived from the word 'busy'. Thus, "business" relates to the state of being busy.
Business may be in the form of Sole proprietorship, where the owner of the business has the sole authority over the establishment. Partnership, where two or more individuals come together to form a joint business. Corporation, can be organized for profit or service, but is owned by multiple shareholders and is carried by a board of directors and in addition to this we find state owned corporates also. Cooperative, for profit or non profit, is a limited liability entity where shareholders do have decision making authority, they may be consumer cooperatives or worker cooperatives.
Characteristics of Business
Economic activity: It is an economic activity because the object around doing it is always to earn money or livelihood and not out of love, affection, sympathy, etc.
Earning Profit: Purpose of doing business is to earn income by way of profit. No business can survive for long without profits. Possible efforts to maximize profits, by increasing the volume of sales or reducing costs is always seen.
Uncertainty of return: Returns in business is always uncertain. The capital invested may return in the way of profit or may be completed vanished in the way of losses, this is where the future of the business was decided whether it continues or shutdowns.
Risk: Risk is always involved in here in the form of losses. It is caused by some unfavorable or undesirable events.
Profession is an economic activity in which people are engaged to earn means for their livelihood by using their Skills and special knowledge that is acquired from many studies and practice in a particular field. It is obviously an economic activity since the ultimate goal for taking up this is to earn some money.
Those who are engaged in a profession which is an economic activity are called as professionals. Professions are generally those who are lawyers, doctors, chartered accountants, etc. Their activities are subject to the guidelines or codes of conduct laid down by concerned professional bodies.
Characteristics of Profession
Economic activity: Profession is considered to be an economic activity because it is undertaken with the object of earning money or livelihood and not because of love, affection, sympathy or any other sentimental reason.
Good conduct: When the Professionals are more skilled and experienced with regard to their work they earn good conduct which in turn gives them an opportunity to earn the maximum reward. No conduct; no work.
Scope for maximizing incomes: It all goes with the experience in the concerned field. Professionals like lawyers, doctors, etc obviously need to face hard days in the very beginning when they make an entry into their respective field. In course of time with good conduct they can make a good incomes.
Qualification: Unlike businessmen, expertise and training is essential for professionals to get on with their work to make good income.
Employment refers to an economic activity where an individual work for a company or and organization and get remunerated. Those who gets employed by others (companies or organisations) are employees and those who employs individuals are employers (may be person, company or an organization). Every employee needs certain qualification and training as prescribed by the employer.
Characteristics of Employment
Economic activity: Employment obviously dropped under economic activity as it is done to earn some means for the livelihood and absolutely not because of love, affection, sympathy or any other sentimental reason.
Qualification: This is very essential for any employee. Unless the employee possesses the prescribed qualifications for a job he never gets appointed fr the same.
No risk: Guaranteed job; regular remunerations are always the best features of this economic activity called employment until and unless the employee behaves properly and never go on his own at work place.
Certainty return: Remuneration for an employee is always certain and is regular until he continues in the job and is not fired out of it.
Conduct: This is a very essential thing for any employee. Norms of behaviour laid down by the employer are to be followed very strictly else will be fired.
Differences betwen Business, Profession and Employment
- Entry: With regard to Business, Entrepreneur's decision and other legal formalities, in some cases and capital investment required as per size and nature of business. Membership of a professional body and certificate of practice is essential for those who are in Profession, little capital needed for establishment. For Employees Service agreement and appointment letter is enough and doesn't require any capital.
- Kind of Work: Business includes Provision of goods and services to the public. Professionals Render their personalised, expert services whereas Employees work as per service contract or rules of service.
- Returns and Risk: In Business returns are Profits earned out of business they are uncertain and irregular, risk is absolute. Professionals charge their own fee, though regular it involves little risk when there is no work. Employees get their salary / wages regularly and it is absolutely no risky.
- Qualification: No such thing is essential to start a business. Expertise and training is essential for professionals to get on with their work. Qualification and training as prescribed by the employer is essential for an employee.
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