Introduction to Business, Profession & Employment
The three terms – Business, Profession and Employment though may seem synonyms to each other, but in a real sense, their meanings are wide apart from each other. The three terms are the basic way to earn a living for an individual. People working around the globe are engaged in either of the three terms.
Knowing each of these terms well and analyzing its difference by chalking a whole table of the three has been done here in this section. Students studying the business studies subject must study this enthusiastically.
Difference between Business, Profession and Employment
Before delving into the comparison study, we must first know distinctively what each term means.
What is Business?
Business refers to the economic activities, which are connected with the production or the purchase or sale of goods or supply of services with the main objective of earning profit. People engaged in business earn income in the form of profit they make out of their venture. Examples: Grocery Shop, Hair Salons are examples of Businesses.
Business is the act of making one's living or making money by producing or buying and selling products. This is any activity or enterprise which is entered into for profit. This does not mean it is a company, a corporation, a partnership, or has any formal organizational structure, but this can range from a roadside peddler to the General Motor.
There can be four kinds of business organizations according to the law, which are Sole Proprietorship, Corporation, LLC (Limited Liability Company), and Partnership. In a sole proprietorship, a Business name won’t separate the business entity from the owner; this means that the owner of the business is responsible and is liable for debts incurred in his own business. If the business acquires debts, the creditors can go after the owner's personal possessions and have their dues in return. A business structure does not attract corporate tax rates. The proprietor of the business is personally taxed on all income from the business. Hence, due to all the reasons mentioned above, the proprietary form of business is discouraged (mainly due to the risk involved), the person should try to make the company public as soon as possible. There is no educational or technical entry barrier in existence in order to become a successful business owner. There are many successful examples of businessmen who have completed their formal education.
Some examples of businesses: fishing, mining, manufacturing industries, Grocery Shop, Hair Salon, Medicine Shop etc are some of the huge types of business.
What is Profession?
The profession includes the activities, which is a requisite of special knowledge and skill which is to be applied by individuals in their occupation. These activities are generally subject to the guidelines or codes of conduct laid down by the professional bodies. People who are engaged in professions are known as professionals.
Examples of Professionals: Doctors, Chartered Accountants etc.
A profession is neither a trade nor an industry, which is delved with three professions: divinity, medicine and law. They are called the “learned professions”.
What is Employment?
Employment is the occupation in which people work for others and get remuneration in return. Those who are employed by others are known as employees, and these employees are hired by the employers.
Example: Any person working for others on a salary basis such as an Accountant, Sales Manager or Peon etc.
Employment is a relationship between two working parties who usually is based on contract and is paid for, here one party, which may be a corporation, (either profit or non-profit organization) or any other entity is an employer and the other is working in accordance with the employer is the employee.
Employees work in return for their payment. This payment may be in the form of an hourly wage by a piece worker or by an annual salary worker. This happens depending on the type of work an employee is assigned for. Also, employees in many sectors get bonuses, stock options; these are all part of their contractual relationship among the employee and employment, which they receive in addition to their payment.
The difference between the three terms can be explained with the following chart given below:
Discussion on the Inter-Relationship between Business, Profession and Employment
Although, all these three activities are distinguished from each other, mainly on the account of factors of investment and risk. Yet one cannot forget the important role played by all the three of them in the existence of others.
A business can only thrive and become successful if the role of professional experts and employees is correctly completed.
Professionals of various types like consulting engineers, management consultants, financial consultants, legal experts, doctors, architects, chartered accountants, cost accountants and others are retained by business identities to deal with a variety of complicated technical problems that the modern big-scale business firms have to deal with. And As the large-scale business requires a huge number of specialists and the number of expert knowledge in modern businesses, In such circumstances, businesses will need skillful management consultants to stay up-float. Economic institutions of recognized importance (mainly the big and successful businesses), provides employment to many peoples and is now the livelihood of those employed by the company.
The prosperity and success of a business depend, not merely on the sales done and the resources of businessmen, but are equally determined by the availability of the right type of employees that have a positive attitude towards the work. Thus, while business provides employment opportunities to people, the employees provide the organized and devoted effort which is a necessity for any business firm to get the best results out of their investment.
Without the business, the word “employment” also loses all its meaning, and thus both of these terminologies highly depend on each other, the disappearance of one will be an existential threat for the other.
FAQs on Comparison of Business, Profession and Employment
1. What is a business venture?
A business venture is a form of a need for a service or product which is lacking in the market. This need is often a type of product that the consumers are requesting or something which serves a particular purpose. After the need is studied, an investor or small-business person with the time and resources to develop the solution for the need, market the new service or product, thereby starting a business venture. The main goal of starting a business venture is to generate profits.
2. Which enterprises get separated from their owners?
The corporations and the owners are not the same body. The company has a distinct identity and individuality that runs the business in its own name, not in the name of the owners. The term ‘Separate Legal Identity’ explains it.
This means, in business organizations, the debts of the business are to be paid by the owner himself if not his own personal possessions will be attached to, in company form the scenario is in contrast to this.
3. Who is a proprietor?
The other name of the business owner is ‘proprietor’. He who owns the business, who formed, runs and manages the business is said to be the proprietor of that particular business. The term “proprietor” itself comes from a business entity type, the sole proprietorship, that only has one owner. A sole proprietorship is very easy to set up but does not provide any kind of liability protection. All of the income, losses and debt will personally be attached to the proprietor (owner of the company), the business will be treated as the personal asset of the owner. If anyone decides to sue the company, it can be translated as a case against the proprietor for his/her personal assets. Due to such reasons, this type of business is not recommended.
4. What are Professional Bodies?
A Professional Body is an organization that includes individual members. They practice a profession or occupation in the organization which maintains an overview of the knowledge, skills, conduct, and practice of that particular profession or occupation. These particular organizations may possess specific knowledge or skills and expertise of academic principles on their members’ professions or occupations, which can be used by their members for their personal professional development and advancement.
The other roles of such organizations or bodies can vary on what type of professional they deal with.
5. Explain the formation and qualification needed to start doing Business, Profession and Employment?
A business is set up in order to generate profits by fulfilling the needs of customers through regular production and/or with the exchange of goods and services. The owner or the proprietor of the business will have to do everything possible to make it happen by completing all legal formalities. Businessmen do not need degrees to start and achieve success in it.
But a professional requires expertise, skills and knowledge in a specialized field to start working as a professional, in a profession, clients pay a fee for the services completed by a professional.
On the other hand, Employment is a contractual obligation between an employee and an employer. Employees need to possess certain job-related skills, knowledge and in some cases a specific amount of experience to take such a job opportunity.