Outline

• SELLER AND BUYER RELATIONSHIP

• Characteristics of a developed, developing
and underdeveloped country
• SDG
• Classification of Entrepreneurs according
to the type of Business
• MSMEs
• Types of Business according to ownership
 ADVERSARIAL
• The traditional transactional
relationship between the buyer and
seller.

• Here, the buyer works by

persistently asking for every
possible discount and deal from
seller
BAROMETRIC

• Involves constant monitoring of

relationship (on attitudes and potentials)
between the two which develops distrust
and may eventually end in just a short –
length contract
COMPLEMENTARY
• The highest level of relationship where
both buyer and seller engage in a true
business partnership because both
matched with each other’s “vision and
values”. Both parties understand each
other’s need and work closely together to
achieve their respective goals.s
 Characteristics of a Developed Country
• A nation that offers economic security
and a high quality of life to its
population.
Economic Development
Economic Security
Quality of life
Tyranny of Averages
Education
Industrialization
 Economic Development
• The process of improving quality of life
of a nation, region or community.
– Involves objectives such as social well
being, economic growth and sustainability.

Infrastructure Consumer Protection

Education Fair Competition Health & Wellness
Markets Justice
Finance Energy
Industrial Base Transportation
 Types of Economic Development
Service Economy
Knowledge Economy
Experience Economy
Public Space
Community
Sustainability & Resilience Safety
Stability Information Technology
Human Rights Culture Research
Political Water Food
 Qualities of Life
• The well-being of individuals, communities,
and societies.
• Examples of things that impact quality of life
– Health - Happiness
– Air quality - Safety
– Food Quality - Freedom from fear
– Water Quality - Community
– Standard of living - Freedom of Speech
– Education - Human Rights
– Knowledge - Legal Rights
 Qualities of Life
– Privacy
– Public Space
– Culture
– Profession & Creativity
– Physical Activity
– Transportation
– Proximity
– Resilience
– Sustainability
 Sustainability
–Is the prioritization of quality of
life and environmental
protection in government
policy, business strategy and
personal action
 Infrastructure
–Are basic facilities, structure,
equipment, technologies and
services that act as the
foundation for economic
activity and quality of life
 Efficiency
–Is the output of something in
comparison to its maximum
potential.
 Internet Backbone
–A high capacity data route that
interconnects large strategically
interconnected networks.

https://simplicable.com/new/developed-
country
 Efficiency
–Is the output of something in
comparison to its maximum
potential.
 Developing Country
–Developing nations are those with low,
lower middle, or middle incomes
relative to other countries. Common
characteristics of developing countries
are low levels of living characterized
by low income, inequality, poor health
and inadequate education. Also they
are countries with low Human
Development Index
 Developing Country
–There are many key structural economic
differences between nations – for
example:
• Relatively low incomes per capita and a low level
of absolute savings
• Lower absolute levels of productivity (labour and
capital)
• Often endowed with rich natural resources
 Developing Country
• A higher dependency on export incomes from
primary commodities / low export diversification
• They have a large share of the population living
in rural areas and employed in agriculture
• Limited scope and support provided by a welfare
system
• A higher informal sector for example in partial
subsistence farming
• Many industries in low-income countries tend to
be some distance from technological frontiers
 Developing Country
• Relatively fast growth of population and
a younger average age
• Rapid urbanisation and large-scale rural-urban
migration
• Weaknesses in infrastructure such as
telecommunications, transport, ports, water and
sanitation
• Weaknesses in institutions such as stable
government, civil service money and capital
markets
 Developing Country
• Relatively higher tariffs and other import
controls
• Tendency to have capital controls / relatively
closed capital markets
• Lower access to advanced country markets

https://www.tutor2u.net/economics/reference
/developing-countries-similarities-and-
differences
 Developing Country
– Low per Capita Income
– Excessive Dependence on Agriculture
– Low level of Capital Formation
– Rapid Population Growth and Disguised
Unemployment
– Lower Level of Human Capital
– Dualistic Structure of the Underdeveloped
Economies
http://www.economicsdiscussion.net/developing-economy/characteristics-
developing-economy/common-characteristics-of-developing-countries-
economics/29990
 Underdeveloped
• It is a country characterised by
poverty, with beggars in the cities,
and villagers eking out a bare
subsistence in the rural areas.

http://www.shareyouressays.com/knowledge/
8-unique-characteristics-of-an-
underdeveloped-economy-with-special-
reference-to-india/93689
Underdeveloped
–Technical Backwardness
–Low per Capita Income
–Inequitable Distribution of Wealth and
Income
– Predominance of Agriculture
–Deficiency of Capital
–Mass Poverty
–Inequality
Underdeveloped
–High Rate of Population Growth
–Unemployment and
Underemployment
–A Dualistic Economy
–Unexploited Natural Resources and
Others
http://www.economicsdiscussion.net/underde
veloped-countries/characteristics-of-an-
underdeveloped-countries-top-14-
characteristics/18971
GDP
–the total monetary or market value
of all the finished goods and services
produced within a country's borders
in a specific time period.
GDP
IMPORTANCE
https://www.investopedia.com/terms/g/gdp.a
sp

– Gross domestic product tracks the health of a

country's economy.
– It represents the value of all goods and services
produced over a specific time period within a
country's borders.
– Economists can use GDP to determine whether an
economy is growing or experiencing a recession.
– Investors can use GDP to make investments
decisions—a bad economy means lower earnings
and lower stock prices.
 Classification of Entrepreneurs

SOCIAL
• offers products and services with the
overall intention of creating social
goods.
• He concentrates on social issues and
does not aim to make profit.
• Example: A person running an
orphanage
LIFESTYLE
• An entrepreneur who makes
their living online. They don’t
have a physical location or
need one to operate.
 TRADING
• are those who undertake trading
activities. These entrepreneurs do
not concentrate on manufacturing
activities.
• They give more emphasis on
distribution and marketing of
goods.
• Example: Agents and Wholesalers
 SERIAL
• An entrepreneur who
continuously comes up with new
ideas and starts new businesses.
• They concentrate both on
production and marketing
activities.
• Example: A Printing Press,
bakery or a textile unit.
SOLO
• A professional who chooses to
go into business for
him/herself “go solo” go
collaborates with others,
grows his/her business without
boundaries and more than
likely without employees.
 INDUSTRIAL
• are those who concentrate in
industrial and production
activities.
• a product-Oriented
entrepreneur.
• Example: A manufacturer of
Automobile spare parts,
computer accessories.
CORPORATE

• are those who exhibit

innovative skills in
organizing and managing
corporate undertaking.
• Example: A Trust registered
under the Trust Act
 RETAIL
• with direct contact with
customers and hence they
are customer oriented.
• Example: An entrepreneur
running a departmental
store
SERVICE
• one who provides services
to customers. They make
profit by rendering services.
• Example: An entrepreneur
running a hotel or dry
cleaning unit
AGRICULTURAL
• one who concentrates on
agricultural activities.
• These entrepreneurs concentrate
on activities like raising
agricultural production, marketing
of fertilizers etc.

https://mymbaguide.com/4-important-classification-
entrepreneurs/#targetText=According%20to%20the%20type%20of,Serv
ice%20Entrepreneurs%20and%20Social%20Entrepreneurs.
TYPES OF ENTREPRISE
ACCORDING TO SIZE
• MICROENTERPRISE
• SMALL ENTERPRISE
• MEDIUM ENTERPRISE
MICROENTERPRISE
• Total assets of less than 3
million
• Employ less than 10 people
• Ex. Sari-sari stores, food
stall, watch repair stall.
Meat stand
SMALL ENTERPRISE
• Total assets between 3 million
and 15 million
• Employ more than 10 people
but less than 100
• Ex. Printing press, laundry
shops, restaurant, travel
agency, beauty salon
 MEDIUM ENTERPRISE

• Total assets more than 15

million
• Employ more than 100 people
Industries can the MSMEs be
found
• Wholesale and retail
• Manufacturing
• Hotels and Restaurants
• Real Estate, Renting, Business
Activities
• Other Community, Social and
Personal Services
TYPES of ENTREPRENEURIAL
BUSINESSES

• MANUFACTURING
• SERVICE BUSINESSES
• TRADING OR
MERCHANDISING
 MANUFACTURING

• Transforming raw materials

into finished goods or
products
 THINGS TO CONSIDER

• RAW MATERIALS
• DIRECT LABOR
• FACTORY OVERHEAD
• PROCESS
 SERVICE BUSINESSES

• Involve the rendering of

work for others, involving
the skills and expertise of
people.
 Hybrid Business
• are companies that may be classified in more than
one type of business.
• A restaurant, for example, combines ingredients in
making a fine meal (manufacturing), sells a cold
bottle of wine (merchandising), and fills customer
orders (service).
• Nonetheless, these companies may be classified
according to their major business interest. In that
case, restaurants are more of the service type –
they provide dining services.
 TRADING OR
MERCHANDISING
• The buying and selling of
goods, without causing any
major change in the form of
the products.
 WHOLESALING
• Goods sold in large
quantities

RETAIL TRADING
• Goods are sold in small
quantities
 Classifications of
Commercial Organizations

• Private Sector Enterprises

• Public Enterprises
• Joint Sector Enterprises
 Types of Business
Ownership
• Sole Proprietorship
• Partnership
• Corporation
• Cooperative
SOLE PROPRIETORSHIP

• a business owned by only

one person. It is easy to set-
up and is the least costly
among all forms of
ownership.
 PARTNERSHIP
• a business owned by two or more
persons who contribute resources
into the entity. The partners divide the
profits of the business among
themselves.
• In general partnerships, all partners
have unlimited liability. In limited
partnerships, creditors cannot go
after the personal assets of the
limited partners
 CORPORATION
• a business organization
that has a separate legal
personality from its
owners.
 CORPORATION
• A shareholder, also referred to as a
stockholder, is a person, company, or
institution that owns at least one share of a
company’s stock, which is known as equity.
• The board of directors, an elected group
from the stockholders, controls the
activities of the corporation.
• Dividend is the share of profits and
retained earnings a company pays out to
its shareholders.
 TYPES OF DIVIDEND
• Cash – this is the payment of actual cash
from the company directly to the
shareholders and is the most common type
of payment. The payment is usually made
electronically (wire transfer), but may also
be paid by check or cash.
• Stock – stock dividends are paid out to
shareholders by issuing new shares in the
company. These are paid out pro rata,
based on the number of shares the
investor owns.
 TYPES OF DIVIDEND
• Assets – a company is not limited to paying
distributions to its shareholders in the form
of cash or shares. A company may also
pay out other assets such as investment
securities, physical assets, real estate, and
others.
• Special – a special dividend is one that’s
paid outside of a company regular policy
(i.e., quarterly, annual, etc.). It is usually
the result of an excess cash build up.
 TYPES OF DIVIDEND
• Common – this refers to the class of
shareholders (i.e., common shareholders),
not what’s actually being received as
payment.
• Preferred – this also refers to the class of
shareholder receiving the payment.
• Other – other, less common, types of
financial assets can be paid out such as
options, warrants, shares in a new spin-out
company, etc.
 Types of Business
Organizations

• Limited Liability
Company
• Cooperative
• Joint Stock Company
 Limited Liability Company

• are hybrid forms of business that

have characteristics of both a
corporation and a partnership.
• An LLC may elect to be taxed as a
sole proprietorship, a
partnership, or a corporation
 Cooperative
• a business organization owned by a
group of individuals and is operated
for their mutual benefit. The persons
making up the group are called
members.
• Ex. water and electricity (utility)
cooperatives, cooperative banking,
credit unions, and housing
cooperatives
Joint Stock Company

• consist of more than 20 people

• The company is registered by giving
it an appropriate name, outlining its
vision and mission and registering it
with the Registrar of Companies.
• https://corporatefinanceinstitute.com/resourc
es/knowledge/finance/dividend/
• https://www.quora.com/What-are-some-
examples-of-private-sector-businesses
• https://www.marketing91.com/8-types-of-
business-ownership/