There are multiple types of businesses functional in our society. But, the three main ones that are very common forms of enterprises includes manufacturing, service, and trading. Here we have broken down each type with examples, and an in-depth explanation right below:
Manufacturing
A manufacturing type of business is a firm that establishes a factory wherein an entrepreneur creates a product and markets it to the target customers for a profit.
A manufacturing firm selects the product that it needs to make, hires and engaged required workers, buys or rents and installs machinery, picks a production friendly place and employs all other important resources to create and sell a product to its key customer segments.
A good example of a manufacturing firm is a biscuit factory that goes into the production of biscuits for consumers . A soap making company is another good example that makes sure you bath with a soap while manufacturing soaps for you and other people.
Most manufacturing setups necessitate a significant amount of cash in the form of sweat equity and bank loans. Due to the legal requirements, forming a manufacturing company normally takes a long time. However, a manufacturing company’s advantage is that it makes a lot of money compared to other sorts of businesses, especially if the owner creates the right product at the right time and sells it to the right people at the right price.
Trading
In a trading type of business, a business owner purchases manufactured goods from a manufacturer and sell them to clients. Manufacturers frequently sell their products to wholesalers, who then sell them to retailers, who then sell them to customers. You don’t need a lot of funds or machinery to start a trading business. However, launching a trading firm requires a specific amount of capital, as well as registration and other services.
Service
As the name implies, a service type of business deals with providing services to consumers rather than actual commodities. Have you ever visited a physician? Yes, he supplies you with services based on his professional learning in order for you to overcome your condition or illness. Manufacturing, like the service industry, is a very broad industry. It could include financial organizations, insurance businesses, healthcare, government services, and so on.
