The term “business” encompasses any occupation in which people engage on a regular basis with the objective of earning profits. Business activities range in scope from the selling of goods to the delivery of services, and in their varied form they exist in all areas of industry and commerce. Regardless of their size, type or structure, all businesses are driven by the monetary motive to profit. The end customer, or client, always plays a key role in this endeavor.
The different types of businesses differ in their strategies and legal structures. They can be for-profit entities that aim to make money or non-profit organizations that focus on a specific social cause. In addition, they may be organized as sole proprietorships, partnerships, corporations or other legal structures.
Service businesses offer intangible services, such as assistance or advice, to consumers and other businesses. These include law firms, consultancy agencies and providers of courier and transportation services. These businesses usually charge for their labor and other services, as they do not sell tangible products.
Merchandise businesses produce finished or unfinished goods that are sold to consumers for a fee. This type of business includes retailers, wholesalers and manufacturers. The final product can be a good, such as clothing or furniture, or a service, such as hair salons and cleaning services.
Manufacturing businesses transform raw materials into finished products that are then sold to customers, or to other companies for resale. They can also manufacture semi-finished products, which are then further processed by other companies into finished goods. Examples of manufacturing businesses are auto makers and wine producers.
Trading businesses purchase and sell items that are not produced or owned by them. These businesses are usually a part of a larger market or trade network. They may deal with local, national or international markets. The most common trading businesses are brokerage firms, insurance companies and stock exchanges.
Professional businesses employ specialised knowledge and skills in their day-to-day operations. They typically work under guidelines set by professional bodies. For example, a lawyer is a professional, and his or her work is governed by the rules and regulations of the bar council.
A small business is one that has a limited number of employees and is owned by a single person. This is a simple setup with easy management, but the owner of a small business is personally liable for any debts or lawsuits that might arise.
A large enterprise has a substantial workforce and a global reach. It has high economies of scale and generates massive amounts of revenue. The largest businesses can be considered multinational corporations, or “MNCs.” In some cases, they are owned by governments and operate on a state or national level, while others are privately-owned.