Types & Forms

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Types & Forms

Types

Non-Profit

An organization that focusing on the public good other then earning profits for its owners/members Pros - Tax deduction, Limited liability Cons - Cost, Shared control Examples - Greenpeace, CARE, American Red Cross Care about serving a mission rather than making money

E-Commerce

The process of buying, selling or exchanging products and services online Pros - No need for a physical storefront, Scalable Cons - High competition, Security threat issues Examples - Amazon, Alibaba Most e-commerce business do drop shipping

Manufacturing

Building/making a product from raw materials Pros - Low maintenance customers, Scalable Cons - Low profit margins, Lack of benefits Examples - Automobile Manufactures, Clothing Produce products in mass production, they are the suppliers to merchandise businesses

Merchandising

Promotes sales of goods Pros - Increased customer & sales, Flexible Cons - Hard to stand out from the crowd, Higher taxes, No Safety net Examples - Drugstore (Shoppers Drug Mart) Clothing store (Nike) Rely on buying low price and selling high for profits

Service

Doing work for someone from getting paid Pros - No inventory, Your an expert at your service Cons - Difficult valuation, Demand cutback Examples - Cleaning Services, Event Planner Sells skills instead of products, so it values labor over physical products

Forms

Co-operative

A cooperative is an organization that is owned and controlled by the people who use its products, supplies and/or services. Cooperatives can vary in their particular purpose but share in common the fact that they are formed to meet the specific objectives of members and adapt to member's changing needs. Pros: Stability, Limited Liability, Equality in voting. Cons: Conflict & Disputes, Lack of privacy, Government Control. Examples: Sunkist, Land O’Lake, Ocean Spray. A co-operative is jointly owned by its members, and operates with a democratic decision-making structure and a profit-sharing approach.

Franchise

A franchise is a type of license that grants a franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor's business name. In exchange for acquiring a franchise, the franchisee usually pays the franchisor an initial start-up fee and annual licensing fees. Pros: Reduced risk of failure, Ongoing business support, Brand recognition and loyalty, Higher profits. Cons: Less control, Reliance on the franchisor, Vulnerability to franchisor blunders, Less privacy, Limited growth potential. Examples: Naruto, One Piece A new franchise opens every 8 minutes during a single business day.

Corporation

A corporation is a legally established entity that can enter into contracts, own assets and incur debt, as well as sue and be sued—all separately from its owner(s). Pros: Enhanced credibility, Limited liability, The ability to attract investors and top talent. Cons: Higher setup and maintenance costs, Double the taxes, Reduced privacy. Examples: Amazon, Google, Microsoft Because it is defined by law, a corporation can technically exist forever. This means that if the owner dies, the company can continue as an operating entity—unlike in partnerships or sole proprietorships where company assets may be tied up in estate and taxation issues.

Partnership

A partnership business consists of two or more people who combine their resources to form a business and agree to share risks, profits and losses. Pros: Cost Savings, Shared Responsibility, Support, Multiple perspectives Cons: Shared Liability, Shared Control, Potential Conflict Between Business Partners Examples: Apple, Ben & Jerry’s A sole proprietorship is the default business structure that new contractors, business owners, and freelancers are categorized under as soon as the government is notified that profit is being made.

Sole Proprietorship

A sole proprietorship is an unincorporated business that is owned by one individual. It is the simplest kind of business structure. Pros: Easy to establish, full control for the owner, no corporate income taxes. Cons: Responsibility for making day-to-day business decisions, hard to take holidays, life of the business is your lifespan. Examples: Tutor, Photographers A sole proprietorship is the default business structure that new contractors, business owners, and freelancers are categorized under as soon as the government is notified that profit is being made.