Q.Compare business with profession and employment.

Business, profession and employment are the three types of economic activity by which people earn a livelihood, but they differ from one another on several distinct grounds.

Economic activities split into three major types — Business, Profession and Employment — compared on several bases:

• Mode of establishment: Business — the entrepreneur's own decision plus any legal formalities. Profession — membership of a professional body and a certificate of practice. Employment — an appointment letter and a service agreement.
• Nature of work: Business — providing goods and services to the public. Profession — rendering personalised, expert services. Employment — performing work per the service contract or rules of service.
• Qualification: Business — no minimum qualification necessary. Profession — qualifications, expertise and training prescribed by the professional body are a must. Employment — the qualification/training prescribed by the employer.
• Reward or return: Business — profit. Profession — professional fee. Employment — salary or wages.
• Capital investment: Business — required as per size and nature. Profession — limited capital for establishment. Employment — no capital required.
• Risk: Business — profits are uncertain and irregular; risk is present. Profession — fees are generally regular and certain; some risk. Employment — fixed, regular pay; little or no risk.
• Transfer of interest: Business — possible, with some formalities. Profession — not possible. Employment — not possible.
• Code of conduct: Business — none prescribed. Profession — a professional code of conduct must be followed. Employment — norms of behaviour laid down by the employer.
• Examples: Business — a shop, a factory. Profession — legal/medical practice, chartered accountancy. Employment — jobs in banks, insurance companies or government departments.