Types of business activities

• Product business

• Service business

• Hybrid business
Product business A business where a seller and buyer exchange an item, which can be seen and
touched, is called a product based business. For example, a Sports Shop.

Service business A business where a seller helps the buyer to finish some work. For example, a cricket
coaching center.

Hybrid business

A hybrid is the one where the business is doing both selling product and selling services. For example,
Rahul starting a sports academy for coaching and selling sports equipment. We also see this in
restaurants where the food itself is the product sold and the catering is the service provided.
1. Write P- Product, S- Service and H- Hybrid for the following businesses.

(a) Ice-cream seller: ___________

(b) Restaurant/Cafeteria Owner: __________

(c) Car-driving School owner: ___________

A sole proprietorship is a business organization type owned by 1 person and all income and losses are taxed
against the owner’s personal income tax return.

The following types of companies or professions are better fits for organizing as a sole proprietorship:
● Tutors
● Independent consultants
● Freelance professionals (e.g., writers, graphic designers)
● Virtual assistants
● Online retailers
Sole Proprietorship
Partnerships

A partnership is a type of business organization between 2 or more people. As partners, these individuals
share management of the business and any profits and losses.
A partnership can have both advantages and disadvantages, including:

Advantages
● Flexibility: Partnerships are generally easier to form, manage, and run than companies.
● Tax benefits: Profits and losses flow through to the individual partners, who report them on their personal tax returns.
● Easy formation: An agreement to enter as a partner can be made orally or in print.
● More business opportunities: A financially strong business partner can help get more funding and cash for the
business.
Disadvantages
● Liability: Partners have joint and several liability, which means that if one partner doesn't have enough money to pay
their share of a debt, the other partners may be personally liable.
● No separate legal entity: A partnership doesn't have a separate legal entity.
● Limited capital: A partnership may have limited capital.
● Limited life: A partnership may have a limited life.
● Transferring shares: A partnership share can't be transferred without the full consent of other partners.
● Business instability: The business may become unstable if one partner wants to leave.
Corporations

A corporation is typically a combination of people or a company that has derived its license from the

state to operate as a single entity and can legally be recognized for a few specific purposes.

Once you obtain the necessary license or registration, you can establish a corporation in most

jurisdictions.
Corporations have advantages and disadvantages, including limited liability for shareholders,
tax treatment, and cost.

Advantages
● Limited liability: Shareholders are not usually personally responsible for business debts.
● Tax treatment: S-corporations don't pay corporate taxes, instead passing profits and losses to shareholders.
● Attracting investors: Corporations can issue stock to attract investors.
● Stock options: Corporations can offer stock options to employees.

Disadvantages
Cost
Corporations can be more expensive to form and operate than other business types.
Double taxation
C-corporations pay corporate income taxes and shareholders pay income taxes on dividends.
Government regulation
Corporations are subject to more government regulation than other business types.
Entrepreneurship Development

Entrepreneurship Development (ED) is a process of training people to become entrepreneurs or to improve

Leadership
Entrepreneurs are able to guide and motivate teams, and make effective organizational decisions. They have a strong sense of ethics and
integrity, and earn the trust and respect of their teams.
Strategic vision
Entrepreneurs have a clear vision for their company's future, and are able to anticipate challenges and set long-term goals.
Communication
Entrepreneurs are effective communicators who can clearly and persuasively convey their ideas.
Adaptability
Entrepreneurs are able to cope with a dynamic business environment, and are always learning.
Resilience
Entrepreneurs are able to withstand or quickly recover from difficult situations, such as rejection from potential customers or investors.
Persistence
Entrepreneurs are willing to go through multiple attempts at running their business before they find success.
Passion
Entrepreneurs are passionate about their ideas and products, and are willing to take risks to make them succeed.
Teamwork
Entrepreneurs are able to work harmoniously with others, and build a solid foundation for business growth.
Entrepreneurs can improve their skills by:
● Gaining knowledge about their industry
● Seeking mentors
● Attending events, workshops, and conferences
● Finding ways to grow their leadership skills
● Increasing their knowledge of business finance
● Embracing their creativity
● Remaining open to change