BUSINESS

IN
GENERAL

WHAT IS BUSINESS
PRACTICAL / LEGAL SENSE
It is any activity involved
in the production and
distribution of goods and
services, aimed to meet
the economic needs of
consumers with an
objective of eventually
earning profit.

WHAT IS:
GNP The total market value of
goods and services produced by a
country in any given period
(usually quarterly, semi-annually
and annually)
INDUSTRY Group of business firms
offering similar goods or services.
(Ex. Electronics, car, chemicals,
petroleum, banking, finance and
construction industries.

WHAT IS:
Economics The study of how a society
produces and distributes its desired
goods and services
Factors of Production The economic
resources to produce
Land - Pertains to all natural resources,
including timber, minerals, petroleum
and the land itself.
Labor refers to the services

INDUSTRY
CLASSIFICATION
1) Agricultural
2) Manufacturing - (produces
goods)

3) Trade (domestic/Foreign)
4) Construction
5) Government sectors

KINDS OF BUSINESS
Based on the nature of principal activity
performed by the business enterprise.
1)

Industries Involves the conversion of raw

materials into finished products or goods
and the application of labor upon raw
materials.

2)

Commerce Involves the process of buying

and selling where the goods are moved from
one place to another.

3)

Services primarily concerned with the

satisfaction of the needs and wants of the
consumer.

SERVICES
Classification of services:
Recreation services which
include TV stations, movie
productions and the
theaters.
Personal services which
include hotels, restaurants,
schools, beauty parlors, etc.

KINDS OF ECONOMIC
SYSTEM
1)

Capitalism a system in which the

production are owned and
operated by private individuals.

2)

Socialism means the ownership

of production and capital by the
government and the regulation by
society as a whole.

3)

Communism stands for the

collective ownership by the
government of consumption goods
and production of goods.

LEGAL FORMS OF
BUSINESS
ENTERPRISES
1) Sole

Proprietorship

2)
3)

Partnership
Corporation

OWNERSHIP -

Single
Proprietorship
Has a capital
investment by one
individual

OWNERSHIP -

Partnership Formed by 2 or more

individuals, who have agreed
among themselves to contribute
money, resources or industry
and engage in business or in the
practice of profession

OWNERSHIP -

Corporation Formed by at least 5 individuals

whose ownership is evidenced
by stock certificates. Corporation
has its own legal identity
because the company can be
sued and be sued.

SINGLE
PROPRIETORSHIP
Advantages

Disadvantages

Easy to set-up or start

Demanding on owners personal

time.

Decision making is left entirely

to the owner

Growth is limited by owners

financial means

PARTNERSHIP
Advantages
Relatively easy to set - up

Checks & balances maintained

with 2 parties around

Disadvantages
Dissolution of
partnership by any
personal rifts
between partners
Equal profit sharing
despite unequal
attention and time
given by partners to
business

CORPORATIONS
Advantages
1) Maximum
flexibility

2) Limited liability of
individual share

Disadvantages
1) Complicated
setting-up process

2)Limited influence
on
mgmt. by
individual
stockholders

START A NEW BUSINESS OR

BUY AN EXISTING ONE

IT DEPENDS:

1) It depends on the nature

and kind of business you
have. There are businesses
where it takes long to
develop products & market.

START A NEW BUSINESS OR

BUY AN EXISTING ONE

IT DEPENDS:

It depends on the
availability of
opportunities for
acquisitions.
2)

START A NEW BUSINESS OR

BUY AN EXISTING ONE

IT DEPENDS:

3) It depends on your personal

bias. (do you want the
satisfaction of building new
companies?)