Types and Structures of Business:
Business come in a variety of shapes and sizes and there are three major types of
businesses.
1. Service Business:
Service type firm offers professional skills, expertise, consultancy,
and other similar products. Example of service business are Schools, Banks,
Broking Firms, Accounting firms, Law firms, Printing Services, Beauty Salons,
Repair shops, etc.
2. Merchandising Business:
This type of business buys products at wholesale price and
sells the same at retail price. They are known as buy and Sell business or
trading business. They make profit by selling the products at prices higher
than their purchase costs. For example, distributors, re-sellers, grocery stores,
clothe stores, toy stores, etc.
3. Manufacturing Business:
It’s a business that uses components, parts or raw
materials to make finished product. Manufactured goods are than sold to
customers. Examples of manufacturing business are washing detergent and soaps,
plastic products, utensils, cars, bikes, biscuits and cookies, etc.
There are Hybrid businesses as well. For example, A
restaurant combines ingredients in making a meal (manufacturing), Sells a cold
bottle of wine (merchandising) and fills customer order (service). In this case, restaurants will be classified
as service type as they provide dining service which is their major business
interest.
If you're thinking of starting a business, you’ll
need to look at the advantages and disadvantages of each different business
structure and work out which structure best suits your needs.