What is business and types of Business

Monday, 4th March 2019

BUSINESS

According to Wikipedia , Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). It does not mean it is a company, a corporation, partnership, or have any such formal organization, but it can range from a street peddler to online entrepreneur such as amazon, Alibab, Aliexpress, jumia etc.

In the same vain Investopedia made us to understand that Business is also the organized efforts and activities of individuals to produce and sell goods and services for profit.

From the meaning of business its clear to us that business is solely anything we do that makes us to relate to others and in the process earn our living from it.

This passage is just a brief introduction to our discussions in business category.

First of all lets see the types of business we will be dealing with

Types of business

Business organizations come in different types and different forms of ownership.

As a newbie or someone who is willing to venture into business its very important that you understand the different types of business and from there you can quickly know the kind of business that will perfectly suit you so that you dont waste time runningthe rat race. The effect of rat race has caused a lot of people a lot such that what they should have achieved in on year took them about 4 to 8 years .All these happened to them due to improper advice at the arely stage.

Now the following are the types of business one can easily find. Please go through it very well so that you will not waste time practicing what will never work for you.

1. Service Business

A service type of business provides nonvisible products (products with no physical form). They offer professional skills, expertise, advice, and other similar products.

 

Examples of service businesses are: salons, repair shops, schools, banks, accounting firms, and law firms. This type of business are suitable for those who are very good in physical skills and can be able to communicate to others what they know.

They make money in their business by teaching others what they k now, rendering the services to others like in the case of hair dressers, class room teachers, and so on.

 

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" businesses. They make profit by selling the products at prices higher than their purchase costs.

 

A merchandising business sells a product without changing its form. Examples are: grocery stores, convenience stores, distributors, book sellers, and other resellers. This type of business is suitable for everyone who is willing to work very hard and even when the condition may turn around. Even when the prices tends to reduce when you already have may products you bought on higher prices. So it is strongly advisable that you calculate yourself before you venture into this type of business.

Notwithstanding it is really a lucrative type pf business and if you are determined you will have more time to enjoy if you are doing well. Its just that in this type of business you bear majrly all the risks associated wit it compared to the former one which is service type.

 

3. Manufacturing Business

Unlike a merchandising business, a manufacturing business buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased.

 

A manufacturing business combines raw materials, labor, and factory overhead in its production process. The manufactured goods will then be sold to customers.

This type of business most of the time demands for high investment compared to other types of business.

Not that you cant start wit low capital but at times some of your competitors will be ahead of you in buying the raw materials and if you eventually start and you are not supplying your customers as often as they need it you will probably run down your business name thereby leading you to stay too long before you can stand well enough to compete with your competitors.

NB: Check yourself and your location before you start any type of business especially this type. Though every type of business needs proper checkup before investing into it.

Finally the last on this list will be Hybrid Business

4 Hybrid Business

Hybrid businesses as the name implies they are companies that may be classified in more than one type of business.

These type of business are mainly common in the agricultural sectors where you will see a company manufacturing fertilizer, and as well engaging in the rearing of animals all combined together. They as well engage in teaching these services to others and so many more offers thy will have.

 A restaurant, also 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.

 

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