A person who is fervid about business and wants to step in this world needs to initiate by choosing a suitable category of business according to their interests and expertise.
Picking up the right business entity is a crucial task, as the choice you made will reflects on your whole business success and also on various factors like how to pay your taxes, how much documentation to be done and how can you distribute your profits.
"When you start a business, go for the lowest hanging fruits"
Types of business on the based product.
There are four major types of business entities-:
- Service Business
- Merchandising business
- Manufacturing business
- Hybrid business
This type of business delivers impalpable products. Examples of this can be retail shops, salons, schools, banks, accounting firms, and law firms.
A merchandising type of business purchase products at wholesale price and sells the same at retail price. They are also commonly known as "buy and sell" businesses. They earn a profit by selling the products at prices higher than their purchase costs. One of the unique thing about them is that they sell the product without changing its original form. An epitome for this can be grocery stores, convenience stores, and distributors.
Contrasting to merchandising, here a person buys products with an intending of utilizing it as materials to manufacture a new by-product. For instance chemical and transportation business.
Hybrid businesses can be classified as a company that integrates more than one type of business. For example the restaurant business.
Types of business based on organization.
Following are the basic form of organization:
- Sole Proprietorship
- Partnership
- Corporation
- Cooperative
It means that a business is owned by only one person.
A partnership is owned by two or more persons.
It is an organization that has a separate legal personality from its owners.
A cooperative business is owned by a group of individuals and is run for their benefit.
Steps to keep in mind while selecting type of business..
- Choose a business where you interest lies
- Construct a business on what you are already familiar with and are good at
- Consider your financial status before choosing a type of business-
It means that a business is owned by only one person.
If you know the particular business then it will intensify the profit level of your business, as it effortless for you to implement practically. Besides this, if you have a strong network connection of people in a specific industry, then consider starting a business that allows you to take advantage of it.
Finance can be one of the effective factors for any business, if you have a weak foundation then one won't be able to build a successfully running business.
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