Types of Businesses

A business where services are provided for a fee.

Advantages: No Inventory (no need to buy or sell products)
Low start up costs
Flexibility (they can be easily adjusted based on the market demand)

Disadvantages: Difficult valuation (harder to value than a manufacturing or retail company)
High competition (intense competition and price wars)
Customer Dependency (need relationships with the customers to make a reputation for the company)

Examples: Spotify
Mississauga Plumbing Service Ltd.
Doctors office
Cuts by Mohid

Any company that uses raw materials or components to create finished goods

Advantages: Boosting the economy and making more jobs for people (manufacturing is very important for economic growth, innovation, and staying competitive)
Control over production (allows for more customization and consistency)
Higher Profit Margins (since they make their own goods, they can reduce costs and earn more profit per unit)

Disadvantages: High startup costs (need money for factories, purchasing equipment, and securing raw materials)
Risk of overproduction (leading to more cost and too much of product)
High energy and maintenance costs

Examples: Under Armour (turns raw cotton into clothing)
Ford (turns raw metals into automotive cars)
Nestle (turns raw cocoa into chocolate products, and beverages)

Organizations that provide products or services to improve or benefit a community

Advantages: Exempt from paying income tax
Can receive gifts from other charities
Many of the goods are exempt from GST and HST which more people will buy

Disadvantages: Average salaries in the not-for-profit sector can be lower than in other industries
Not-for-profit organizations can be under-resourced
Extensive paperwork requirements

Examples: YMCA
Red Cross
Any small sports league
National Geographic

A business that purchases finished products and resells them

Advantages: No cost to create own products
Higher market demand (people always buy physical goods)
Easy to Automate (can be automated for efficiency)

Disadvantages: High startup cost (need to buy products in order to resell)
Risk of unsold goods (products may not sell and business may be affected)

Examples: Walmart
Toys R Us
Target

Businesses that buy and sell goods and provide services over the use of the internet

Advantages: No need for physical storefront
Reduced overhead costs (as only you need to make a website to startup)
Easier to keep track of sales

Disadvantages: Security threats (easier to get hacked because it is on the internet)
Competition ( a lot of people have opened up e-commerce businesses)
IT issues (sometimes the internet could be slow)

Examples: eBay
Amazon
Etsy
Alibaba