Forms Of Business Organizations

2 min read

Forms Of Business Organizations

Businesses come in various forms. One of the ways that businesses are classified lies in their methods of generating profits. These structural forms are the general forms of business organizations. So, without further ado, let’s look into some of these forms of business organizations:

Forms Of Business Organizations

Service business

Service business - Forms Of Business Organizations

Service businesses are businesses that provide certain professional assistance to clients. The product in this type of business is intangible. Instead, it’s an activity helping third parties in a variety of areas while serving a commercial purpose. Service businesses range from educational institutions, financial institutions, medical institutions, law firms to personal care institutions, transportations, hospitality services, consultations, maintenance services, etc. Now, service businesses are not only done traditionally but also virtually.

Customer service experience plays a key role in the success of a service business because, after all, customer service is all that the business has to do to ensure satisfaction. Through customer service, these kinds of businesses gain competitive advantages. To further improve the quality of work, friendliness of employees, timeliness of the service, solve customer problems. At the same time differentiate from competitors, extensive research and training is required.

Merchandising Business

Merchandising Business

Merchandising businesses are one of the most common types of businesses that people interact with. The seller buys products at wholesale prices and sells them at retail prices. The way to make profits is to sell products at prices higher than the cost the products were bought. These businesses are “buy and sell”.

It’s the responsibility of the merchandiser to ensure that the product arrives at the right store, at the right time and in correct quantities. Merchandising businesses buy products from an array of distributors, both from domestic and international markets.

There is a myriad of examples for this kind of business. The last thing you brought from a grocery store is a product that was purchased as wholesale goods from a distributor, which was later made available for customers. You might have bought the product in a small for-personal-use size but the store has purchased the products in large quantities. The difference in the amount paid by you to the store and the amount the store paid to the wholesaler is the store’s profit. Due to these profits, the store is available for you to provide all your necessary items.

Service providing companies aren’t considered merchandising unless they offer merchandise as part of the service. For example, if a salon offers shampoos and other personal care products along with personal care services, then it is a merchandising business.

Manufacturing business

Manufacturing business - Forms Of Business Organizations

A manufacturing business, unlike merchandising business, is a business that involves the transformation of the products purchased. This business uses raw materials, labor, machines and other components in the production process to create a whole new product. These components are placed on an assembly line to produce the merchandise. This enables the step-by-step production of the final product. The manufactured products are then sold to customers. The products can also sell to distributors, wholesalers and other manufacturers.

How are a manufacturer and a wholesaler different? A manufacturer assembles the final components that are also used by other manufacturers to create more complex products. A wholesaler, on the other hand, does the work that lies between the operations of the manufacturer and the retailer. This involves buying the products from the manufacturer and reselling them in smaller amounts for a higher price in order to make profits.

Manufacturing businesses are subject to more legal regulations than others, ranging from labor laws to environmental laws. Manufacturing businesses are regularly causing pollution. Besides, it also deals with labor unions, which, in the 21s Century, are more active and advocate their rights involving wages and benefits.

Finally, it is easily understandable that business is a lot more than just buy and sell. Businesses can flourish as well as make the lives of consumers better if it can contribute to the economy positively.

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