What is Business and Types of Business?
A business is an organization where people work together to earn profits in term of money. In a business, people work to make/produce and sell products or services. People buy the products and services from the makers/producers and business owner is the person involves people to work for him and get paid. A business can earn a profit by selling the products and services it offers.
Manufacturing business is related to production of consumer products. These products can be produced with the help of machinery, raw material and labour. To make a product in factory, owner of the company needs to buy machinery, raw material for goods to be made and hire labour, manager, accountant and technical staff so that their skills can be utilized to get good quality results and profits from sale of final/finished product. Manufacturer’s needs to maintain stock of the item produced to manage the sold and remaining quantity of goods.
When a company produces final/finished good in the factory and after the finalizing MRP (Maximum Retail Price) as per guidelines, they distribute these goods in bulk to wholesalers and distributors. Company needs a strong quality product to achieve its sale targets and high profit margin. A wholesaler or distributor can purchase goods for resale purpose from manufacturers and maintain stock to manage the sold and remaining quantity.
Wholesalers then supply goods to the small entrepreneurs, outlets, shopping malls etc. for consumers to buy. These small outlets, shops are known as retailers. Consumers can visit and buy products from these shops as per their requirements to fulfill their needs. Online stores are also included in retail business where customer can buy products online through various e-commerce websites.
A service company is a business that earn profits and generate income by providing services instead of selling physical products. Service providers do not need to maintain stock of goods. They do not need to buy any goods from manufacturers, wholesalers and retailers for resale purposes. Service provider is the one who give only services to earn profits from consumers those requires to fulfill their needs by getting these services. Some examples of service business are Plumbing, Electricity repairs, Educational services, Accounting and Taxation Services etc.