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Manufacturing, service, and trading are the three most common types of enterprises. We’ve broken down each type with an in-depth explanation below:
A manufacturing firm owner establishes a factory, selects what to manufacture, engages required workers, installs machinery, locates a production-friendly location, and employs all of his or her other resources to create a product, market it to the target customers, and thereby profit from it.
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.
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.
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.