Comparison of Business, Profession and Employment

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Introduction to Business, Profession & Employment

The three terms – Business, Profession and Employment though may seem synonyms to each other, but in 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 of 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 the 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, partnership, or has any formal organizational structure, but this can range from a roadside peddler to the General Motor. 

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.


What is Profession?

Profession includes the activities, which is 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 the working in accordance of 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 relation among the employee and employment, which they receive in addition to their payment.  


Difference Between Business, Profession And Employment

The difference between the three terms can be explained with the following chart given below: 

Basic

Business

Profession

Employment

Mode of establishment

Entrepreneur’s decisions and other formalities that is required 

Membership in a professional body with a certificate of the same.

Appointment letter and service agreement. 

Nature of work

Providing goods and services to the people

Rendering personalised, professional services.

Performing the work as per the service contract.

Qualification

No minimum qualification is necessary

Expertise and training in a specified field.

Qualification and training as per the instructor.

Reward or Return

Profit incurred

Fee Charged

Salary or Wages earned

Capital Investment

Capital is invested as per the size of the business unit.

Limited capital for establishment.

No Capital Required.

Risk 

Profits are not certain here.

Fee is generally regular, less risk

No risk.

Transfer of Interest

Possible after formalities are done.

Not Possible

Not Possible

Code of Conduct

No code of conduct is necessary

Professional code of conduct to be followed.

Conduct as laid down by the employer.

FAQ (Frequently Asked Questions)

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.

2. Which enterprises get separated from their owners?

The corporates and the owners are not the same body. The company has a distinct identity and individuality that runs the business in their 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 owners 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 the proprietor of that particular business.

4. What are Professional Bodies?

A Professional Body is an organisation which includes individual members. They practice a profession or occupation in the organisation which maintains an overview of the knowledge, skills, conduct and practice of that particular profession or occupation.