Business classification

A local business, such as a newsagent, corner store, hairdresser, mechanic or pharmacy, has a very restricted geographical spread. It serves the surrounding area and is in no position to offer a range of products to another suburb or town.

When a business grows it's range of products, the area it can serve also expands. When this happens it develops into a national business. A national business operates within just one country. This expansion process contiunes within the country of origin until it runs out of customers to sell to. If the business wants to expand it will have to export and sell its products in other countries.

A global business is a large business with a home base in one country that operates patially owned or wholly owned business in other countries.

Determined by number of employees, the number of owners of a business, market share, the legal structure.

Small or medium sized businesses are classified by:.The owner makes most management decisisons , such as who to hire, what to produce and how to advertise a produc t..The owner provides most if the capital.The business has little control within the market. .Independently owned and operated.Usually locally based Less than 20 employees, independently owned by sole trader partnership.

Small or medium sized businesses are classified by:.The owner makes most management decisions , such as who to hire, what to produce and how to advertise a product t..The owner provides most if the capital.The business has little control within the market. .Independently owned and operated.Usually locally based 20-199 employees, owned and operated by a few people or private shareholders. Partnership/private company.

200 or more employees, owned usually by thousands of public shareholders. Public company.

Primamry indutries include all those businesses in which production is directly associtaed with natural resources. E.g fishing, mining, forestry.

Includes all businesses that take the output of firms in the primary sector and process the raw materials into finished or semi-finished products. E.g iron ore, coal and limestone are turned into steel. A semi-finished product used to create cars.

Businesses in the teriarty group provide a service. The tertiary industry involves people performing a range of services for others. E.g retailers, dentists and banks.

A franchise is an agreement a person buy the right to use the name and distribute the goods or services of an exsissting business. The franchisor sell the rights to the franchisee. The franchisee receives a well known and advertised business name and the required training and staff development to setup their own store with very minimal stress.

Franchisor:.Fast and selective product distribution.Avoid costs of construction..Does not have to operate outletsFranchisee:.Oppurtunity to start wit limited finances.Guaranteed customer base..Established name.Managment back-up.PRoven methods of business

Franchisor:.Unsuitable francisee.Disagreement over conditions and terms of contractFranchisee:.Franchisor retains great deal of control.Limited scope for individuality n business operations.Disagreement over conditions and terms of cotract..If too successful, franchisor may open own outlet.