There are three major types of businesses:
1. Service Business
A service-type firm offers intangible (i.e., non-physical) items. Service-type businesses provide guidance, professional skills, knowledge, and other items of a similar nature. Examples of service businesses are Education, Tourism, Beauty Salons, Banks, Consultancy firms, accounting firms, and law firms.
2. Merchandising Business
This kind of company purchases goods at wholesale costs and resells them at retail costs. They are known as “buy and sell” businesses. By charging more for the goods than they paid for them, they turn a profit.
A company that engages in merchandising sells a product in its original form. Grocery stores, convenience stores, distributors, and other resellers are a few examples.
3. Manufacturing Business
A manufacturing company, as opposed to one that sells goods, purchases goods to utilize as raw materials to create new goods. Thus, the purchased goods change.
A manufacturing company uses a combination of factory overhead, labor, and raw materials in its output. The finished products will subsequently be offered for sale to consumers.
4. Hybrid Business
Companies that fit into multiple business categories are considered hybrid firms. For instance, a restaurant manufactures a beautiful meal by combining components, sells a chilled bottle of wine as merchandise, and fulfills customer requests as service.
However, these businesses might be grouped based on their primary area of operation. Restaurants offer dining services, therefore in that situation, they are more of a service type.