Download Forms and types of business and their classifications including their differences and more Papers Business Finance in PDF only on Docsity! Forms and types of businesses: Discussed The number of people who want to try and take the risk of putting up a business is increasing especially in times of pandemics. Although this is good news because it creates more job opportunities for others who can’t engage themselves in business. Moreover, this can also help to increase the country’s economy, but businesses are risky and somewhat difficult to manage especially nowadays where there are already established companies in the same industries that someone might want to create a business with. The best way to overcome obstacles and soon become a successful businessman/woman is to simply acquire knowledge about the business world. It might take you some time to understand everything about business but knowing the basics is the only thing you need, you can just learn the rest through experiences. For this article, I would like to tackle the forms and types of business. You might be wondering why some well-established companies have the surname “corp.” or “inc.” these surnames will be discussed later. Types of business Although businesses have a common goal: to generate and earn a profit, we should still identify the differences between their types so that it would be easy for us to start one in the future. The following are the three types of business; please note that in some journals these are also called “types of business according to activities” • Service business - this type of business offers services to generate income. It utilizes human resources to provide intangible products/services to customers such as barbershops, salons, spas, etc. The advantage of a service type of business is that we don’t need to account for inventories, and the owner doesn’t need to have a large place or area to start this type of business. However, regular training of human resources and monitoring of their performance is a must, motivation and regular compensation for the motivation of your employees are needed so the business becomes more productive, and this might lead to the further acquisition of costs and affect your profit. • Merchandising business – examples of this type are supermarkets, grocery stores, convenience stores, and sari-sari stores. While service businesses utilize intangible products, this type uses tangible products usually bought from suppliers and resell with markup to the consumers. • Manufacturing business – manufacturing businesses buy products that will be used as raw materials to produce new products. For instance, AB-Pea Company is a company that produces or manufactures peanut butter. The company’s raw materials are peanuts and other ingredients that are essential in making butter. In addition, labor and overhead costs, including facility costs, are included in the computation of the total cost so that the owner can decide on the price without acquiring loss. To put it simply, think about a vendor who makes banana chips. The vendor transforms raw bananas into chips and sells them. This is what you call manufacturing because you processed the products into a new ones. Forms of business and the advantages/disadvantages of each form
