Essay Sample on Business in the World and Business Types

Introduction

Business is an activity, profession or occupation where a person can get his or her living from to cater for his basic needs and in order to make a profit. The business consists of three types: these include service business, merchandising business and manufacturing business. The service offers products that are intangible and with no physical forms. For example in a barbershop to get a haircut, the barber offers professional skills and when visiting a counselor for guidance and counseling, the counselor offers advice. The service business also includes schools and other learning institutions where one can get knowledge.

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Merchandising form of business includes buying of product at a wholesale price may be from a manufacturing firm and selling at a retail price. This includes tangible products like groceries, unlike the servicing firms. They make their profits by selling their products at a higher price that they had bought. Lastly, we have a manufacturing business; this firm is the one that supplies the merchandising business with products. It deals with combining materials, labor, and skills to make new products and selling them to their customers. There is another form of the business form called the hybrid business; it combines manufacturing, merchandising and service business.

Business has its own forms of ownership. These business organizations include companies known as limited liability, corporation, partnership and also sole proprietorship. A sole proprietorship is a kind of business that is run by one person for his or her benefit. This kind of business is the most common and simpler to establish. Retailers and some wholesalers use the sole proprietorship type of business.

• The merits of a sole proprietorship include
• The owner has full control when he is running his business
• The owner enjoys a 100% profit
• The business requires low capital to start.
• The business requires minimal supervising since it's the owner who is working there.

Disadvantages of a Sole Proprietorship

• The owner is fully responsible for losses.
• There is no difference between personal and business income.

The partnership is a type of organization that includes two business owners who invest their money, property, and labor in business for maximization of profits. The two owners come to an agreement and they acquire a legal certificate from an advocate concerning their form of business

Advantages of Partnership Form of Business

• There is more capital in the business because the owners share resources.
• Partners share equally the profits among themselves
• It is easier to establish and maintain.

Corporation type of business is formed by a group of shareholders in the company who have signed an agreement. They make their profits mainly from tax collection and other entities then they share profits generated among them. In this type of business, the person with the most shares is regarded as the owner of the company and he or she has the final say in the company. The disadvantages of corporations are; its operations are and maintenance is costly and it is also expensive to establish.

The main reason for one establishing a business is to increase sales and profit maximization. Introduction of business lead creating of new opportunity jobs and one you go global you reduce the dependence of local economies. As a good businessman or woman, you should be able to identify the problems of a customer and to satisfy his or her needs.