5 Types and Forms of Businesses

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5 Types and Forms of Businesses

Types of Businesses - Non-Profit Definition -An organization that operate for public benefit and not profit -Primary goal is to serve a mission or cause -And money made is reinvested back into the organization Advantages And Disadvantages -Strong sense or purpose and commitment among employees -Generally viewed as trustworthy organizations with enhances their ability to raise funds and build partnerships -Many non profit businesses are reliant on community support, including volunteers and donations -Limited resources, which makes it harder to start expanding Examples -Charities -Healthcare providers -Educational facilities -Environmental organizations Other interesting information -Non profits are increasingly focused on measuring their social impact and demonstrating their helpfulness

Types of Businesses - E-Commerce Definition -Makes buying and selling of goods or services on the internet -Uses online platforms and websites, as well as apps to makes transactions Advantages And Disadvantages -Global reach, these businesses can be reaches anywhere and expands the market and customer base -24 hours availability, as the online shops are open the whole day anywhere -Lower costs as well as a high level of personalization online -Online competition, as the market is highly competitive -Cybersecurity concerns, getting your store or account hacked is a big issue -Customers cannot physically examine the product before purchasing Examples -Online retailers -Digital marketplace -Drop Shipping businesses Other interesting information -Mobile devices are increasingly used for online shopping -Social media plays a significant role in e- commerce

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Types of Businesses - Manufacturing Definition -Transform raw materials into finished goods -Use machines, labor, and tech to produce products on a big scale Advantages And Disadvantages -Large scale production can lead to lesser costs -Manufacturers have direct control over quantity and quality of their products -Bulk purchasing reduces expenses -High startup costs, as setting up a facility requires a lot of investment to purchase equipment, machinery and more -Manufacturing processes can generate pollution and waste Examples -Automotive manufacturers -Food processing companies -Pharmaceutical companies Other interesting information -Automation is transforming manufacturing process, increasing efficiency and reducing labor costs

Types of Businesses - Merchandising Definition -Merchandising business focus on planning, developing and present products -They aim to maximize sales and profit by displaying and promoting goods Advantages And Disadvantages -Increased sales, effective merchandising can attract a lot more customer -Visually appealing displays of the product to the public encourage people to purchase it -High costs, creating and maintaining a good display can be expensive -Customer preferences and trends can change rapidly, requiring frequent merchandising changes Examples -Retail stores -Online advertising companies -Grocery food chains Other interesting information -Visual merchandising has an important art in influencing consumer behavior

Types of Businesses - Service Definition -Focuses on selling actions and not things or items -Customer is often involved with the action Advantages And Disadvantages -Lower startup costs -More flexibility and adaptability -Can help build relationships between the customer and client -The quality can change depending on things like skills and performance -Hard to expand the business -Business is very dependant on the quality of employees Examples -Law firms -Hospitals -Banks -Schools -Tech support Other interesting information -Mainly sell help, not items -People and skills are the main product -Customer satisfaction is important

Co-operative It’s a business that is owned by a group of people (members) that share a common need/goal. Advantages: - provides employment - more opportunities for investment - social benefit for communities - product and service access Disadvantages: - they can fail if there is conflict within the group - all members are required to fulfill their work for the best chance of success, and sometimes, it’s difficult to make others do their part, which may make the business fail Examples: - community grocers - funeral services - recreation

Franchise A business model where an individual or group (franchisee) is given the rights to operate using the branding, operation methods, and products of an established company (franchisor) for initial fees and continuing royalties. Advantages: - expertise in the market - higher success rate - higher profits - opportunities to expand Disadvantages: - expensive start up cost - reduced privacy - ongoing fees Examples: - McDonald’s - Subway - Starbucks - KFC

Corporation A business that was made legally and can own assets and incur debts. Advantages: - liability is limited, benefiting owners - rates of taxes are lower - facilitates accessing financing and grants Disadvantages: - complicated and expensive set up - shareholders have limited control - less privacy Examples: - Amazon - Apple - McDonald’s - Microsoft

Partnership A business made by two or more owners. Advantage: - more expertise and skill - easy to start up - low start up costs Disadvantages: - arguments/conflicts/disagreements - splitting profits - emotional issues Examples: - Bill Gates and Paul Allen (founded Microsoft) - Steve Jobs and Steve Wozniak (founded Apple) - Larry Page and Sergey Brin (founded Google)

Sole Proprietorship It’s a business that is unincorporated and is owned by one individual. Advantages: - easy to start - owner has full control - low startup costs Disadvantages: - unlimited liability for debts - you have full responsibility for business decisions Examples: - landscapers - tutors - personal trainers

Forms of Business Ownership