FUNDAMENTALS OF ENT 101

ENTREPRENEURSHIP
BY Maliha Moeed
Agenda / Topics

• What is business
• Classification of business
• Types of businesses
• Private enterprise
• Forms of businesses
What is business?

• The term business refers to an organization or enterprising

entity engaged in commercial (trade), industrial
(manufacturing), or professional activities.
• Profit or non-profit
• Small to large (amazon and Walmart)
• Business activities can take place anywhere, whether
that’s in a physical storefront, online, or on a roadside.
• Legal procedures.
Classification of business

Enterprise (a) (b) (c)

category Employment size Assets (excluding land sales
&building)
Small Up to 50 for 30 millions for Up to 100 million
Woking committee on manufacturing & manufacturing 20 million
definition defined SMEs as services for services & trade
enterprises fulfilling the Up to 20 for trading
criteria either as "a and b" or Medium From 51 up to 250 More than 30 and up to 100 More than 100
"a and c" for manufacturing million for manufacturing and up to 300
& services more than 20 and up to 50 million
From 21 up to 50 million for services & trade
for trading
Classification of business

SME MANUFACRTURING TRADING SERVICE

DEFINITION CONCERNS CONCERN CONCERN
AS PER PRs
As per prudential regulation Maximum 250 50 250
of SBP employees
Maximum 300M 300M 300M
annual sales
Maximum 100M 50M 50M
assets ( exc:
land and
building
Types of businesses

Manufacturing Service Merchandising Hybrid

 Private •A private enterprise system is an economic system
that reward firms for their ability to identify and
enterprise serve the needs and demands of customers. This
system minimizes government interference in
system economic activity.
Four principle of private enterprise
• The right private property
Right to buy, own, use, and sell.
• The right to freedom of choice
What type of work to do, where to
work, and how and where the money is
to be spent.
• The right of profit
Have right to all profits.
• The right to compete
Have freedom to compete by
developing better products, altering
prices, developing unique advertising
programs, and having the product or
service where and when the consumer
wants it.
 Sole Partnership
proprietorships firms

Forms of
businesses Limited
company or
limited liability
Corporations
company (PVT
Ltd in
pakistan).
What is sole proprietorship?
Advantages
• All profits are subject to the owner
• There is very lilltle regulations for
proprietorships
• Owners have total flexibility when
running the business
• Very few requirements for starting
----often only business license
Disadvantages
• Owner is 100% liable for business
debts
• Equity is limited to the owner's
personal resources
• Ownership of proprietorship is
difficult to transfer
• No distinction between personal and
business income
What is partnership firms?
Advantages
• Shared resources provide more
capital for business
• Each partner shares the total profits
of the company
• Similar flexibilty and simple design
of a proprietorship
• Inexpensive to establish a business
partnership,formal or informal.
Disadvantages
• Each partner is 100% responsible for
debts and losses
• Selling the business is difficult
requires finding new partner
• Partnership ends when any partner
decides to end it