What is a business?

 An organization or economic system where

services are exchange for one another or for
money.
 It is an entity in which economic resources are
put together and processed to provide goods
and services or outputs to customer.
 It involves major activities like purchasing,
financing, manufacturing, marketing, advertising,
selling, trading and accounting.
 Entrepreneur vs. Business Person

 Entrepreneur - is a self motivated person who is

not afraid to undertake new ways of
accomplishing something
 Entrepreneurship – it is the capacity and
willingness to develop, organize and manage a
business venture along with any of its risks in order
to make profit.
 Entrepreneur
Entrepreneur vs. Business
Business
Person
Person
 Insight aspect –  Business aspect –
how new and private how can activities be
ideas can be applied arranged and
so that they may organized in such a
have more social way and guarantees
utility, profit
 Innovator, observant  Imitators, wait for the
innovation made by
the entrepreneur
 Entrepreneur
Entrepreneur vs. Business
Business
Person
Person

 Risk-taker  More likely to play

 Goes beyond the safe
profit motive  Motivated by
 Founders of the financial reward of
company and other the business activity
forms of business
organization
TYPES OF BUSINESS
ACTIVITIES
 1. SERVICES TYPE OF BUSINESS
 product with no physical form like skills, field of
expertise and consultancy.
 provide service rather than products to customer
EXAMPLES:

Salon Hotel Laundry shop School

 2. MERCHANDISING BUSINESS
 Sell product they purchase from other business to
customers.
 A buy and sell business.

EXAMPLES:

Convenience Store Grocery Store

 3. MANUFACTURING BUSINESS
 business that makes “finished goods” from “raw
materials” and sell it to customers.

EXAMPLES:

Convenience Store Grocery Store

FORMS OF BUSINESS
ORGANIZATION
 1. SOLE PROPRIETORSHIP
 business owned by one person
Advantages Disadvantage
 Total undivided authority  Unlimited liability
 Low organizational cost,  Limitation on size
license, and registration  Limited by managements
fee ability to be jack of all
 Tax savings trades.
 Less restrictions on this
type of business
 2. PARTNERSHIP
 An association of two or more people bind
themselves to contribute money, property or
industry to a common fund.
General Partnership Limited Partnership
 profit and losses are shared  there should be at least one general
by all partners. partner
 everyone has unlimited liability  the other partners are called limited
partners who will not actively
for all business debts. participate in the management of
 The payment for liabilities business.
extends to the personal assets  The liability for business debts of a
limited partner is limited only to his
capital contribution to the partnership
 3. CORPORATION
 An entity created by law that is separate and
distinct from its owner.
Characteristics of Corporation
 Has separate legal existence  Stockholders have limited
from its owners liability
 Stockholders have limited  Must pay income tax on its
liability earnings
 Has transferable ownership  Has an artificial/juridical person,
 Ability to obtained capital endowed with the ability for self-
 Have continuous life management, and has a board
of Directors as a chief governing
authority.
 3. CORPORATION
 An entity created by law that is separate and
distinct from its owner.
Ethical Issues of Corporation
 Tax Fraud
 Irregular accounting practices
 Bribery involving top management officials
 Wasteful personal spending of company
profits
 Rights of workers