What is Business Types Your Business?
Starting a business is not that easy sometimes. After finding collateral and a team to run a good business, people still need to know many features related to business. The first thing to do is to select the right business types. The key success of a business is to find a business that fits the passion and interest of the owners. Therefore, to get the right business is the essential step to start a company. Business runners have to be a visioner when choosing the business. However, they need to be realistic in observing the market. Besides, it is also essential that people understand the risks when dealing with a certain kind of business. Innovators will know what to take with the brilliant ideas come.
Though innovators create various new and unique business types, there are actually three common business types to choose from. A business is an organization that utilizes economic collateral to provide products or services to use by customers for financial exchange.
It is also possible that a business is offered for other good in exchange. Based on the organizations, business is divided into several types. There are also several kinds of business based on the ownership.
Here is the list of business types based on some factors.
Business Types based on the Revenue Sources and Ownerships
- 1. Service Business
- 2. Merchandising Business
- 3. Manufacturing Business Types
1. Service Business
This is the type of business that offer intangible products. There will be no goods with a physical form to offer by this business. It will work to serve professional skills. People can use their expertise in order to run this business. However, this business does not have to be the individuals with those special skills. It can be a company that offers people with certain skills or expertise. Those who give advice or help related to some complex matters can be included as service business runners.
The examples of these businesses in beauty sectors are beauty salons, spas, nail salon, and skin care clinic. In the latter example, people sell both service business and also skin care products. Meanwhile, there are also services that offer special skills in the fashion such as tailor, fashion designers, makeup artists, and stylists. There are also some service businesses that work in education industries such as schools, course, and language proficiency certification institution. Besides, there are also service businesses in financial fields such as accounting firms and banks. There is also a service business that offers skills such as repair shops and mechanics. Law firms and hospitals are also in this type of business.
2. Merchandising Business
Many millionaires in the world open this kind of business. It buys products at wholesale price in order to get the revenue. The higher retail price will provide high profit for the company. There are some giant corporations work in this business. Macy’s and Wallmart are two examples of the giant merchandising business. The companies obtain the profit by simply selling the products at the higher rate than the original rate. The price is still profitable after purchasing costs added. This business does not pass production and processing stage because it does not change the form of the products. Convenience Stores, distributors, grocery stores, drug stores, and many other resellers are the examples of this business.
Today, people can use the online supplier for running this type of business. A giant marketplace portal will help buyers to meet wholesale suppliers from the original country. The price will be much lower and they can even get reduced shipping cost. To buy the products right from the factory distributors will give much revenue. It does not matter if the buyers have to ship the products internationally because shipping cost is getting lower recently. Plus, they can still add the cost into the selling rate.
3. Manufacturing Business Types
This business does two kinds of jobs. The first task is to buy products just like the task of merchandising business. However, in this business, the products are used as a material to make a new product. The business includes the transformation of several materials into a totally new product. This type of business requires various human resources. People can start the business in a small form. People call it a home industry.
Meanwhile, when it turns out to be a bigger factory, it will be a giant corporation of the manufacturing business. The business will absorb the purchasing team or procurement team to buy the materials. Procurement professionals will help the companies to make a research and selection to find the best supplier for materials required. Besides, the business will hire skilled labors. Factory machines technicians, maintenance teams, and other skillful workers will be in this industry.
There is one type of business that we often meet in the world of corporations. We can find the hybrid business that offers more than one type of business. The aforementioned example of a skin care business offers this kind of business type. In a skin care clinic, the professional beauty assistants, nurses, and dermatologists work together to serve the customers. Besides, the place sells skin care products right away. And when the doctors and laboratory teams can produce the skin care products in their own lab, it means the clinic also works in the manufacturing industry.
Business Types Based on the Organization Forms
There are also three types of business based on the ownership. The first type is the sole proprietorship. This business is owned by one person. This business is usually still small and easy to build. Because of the form, the owner will face unlimited liability. It means, in case the owner owns a debt, the creditors may claim the personal assets of the owners in case the owner cannot pay the debt.
The second type is a partnership business that is owned by two or more people. The last type is the corporation. This type of business has a separate legal status that split the business assets with the personal assets.
Those business types have different management and risks. Business runners need to have different mentality and mindset in handling each type of the business.