Common Types of Businesses
The term “Business” is a broad term. It encompasses a lot of different activities, but the purpose of this article is to discuss only a few. A business is simply defined as a separate entity or corporation organized for the purpose of conducting commerce or conducting a commercial activity. Businesses may be sole proprietorships, partnership, corporations, LLCs, and any number of other names. Businesses may be publicly or privately held, for profit, non-profitable, or nonprofit. There are even “virtual businesses,” as well.
Non-Profit: Non-Profit businesses are not-for-profitable or profit making ventures. They are usually run with a social conscience and are often used by low-income families, immigrants, and people of many different cultures. They can also be used by people who are struggling just to make ends meet. A popular type of non-Profit business is the raw food industry. This industry is often used by shelters, women, and children, who are struggling to make ends meet and can’t afford to buy fresh food from local grocery stores.
Service Business: A Service Business is a separate entity than a Business and serves a distinct customer base. Many times, Service businesses carry out activities such as cleaning, laundry, and lawn care. An additional service aspect is usually provided by these types of businesses, which can include professional administrative assistance, or they may provide training for other employees on a contractual basis.
Merchandising Business: Merchandising businesses are primarily engaged in the sale of products. They may carry out research and development, but the bulk of their work is usually focused on the sales of tangible items. Common goods sold by merchandising businesses include clothing, apparel, electronics, jewelry, watches, books, accessories, and other consumer related merchandise. Most of the time, Merchandising businesses can work with suppliers that have the required contracts and can provide the same amount of research and development that the main office may use.
Private Label Rightships: A Private Label Rightship, otherwise known as PLR, is an agreement between a business or company, usually an affiliate, and someone else. In essence, the business owner gives the rights to use his or her name to sell a product line and charge a premium for it. Private Label Rightships are commonly used in conjunction with affiliate businesses and are a popular choice among small to mid-size entrepreneurs who lack the funds to start or sustain a traditional brick-and-mortar store.
Sole proprietorship and Corporation: A sole proprietorship is a different type of entity than most others. A sole proprietorship is a legal entity that exists solely for the benefit of one individual. Corporations, LLCs, and other corporations are the usual form of sole proprietorship. In a sole proprietorship, there is no separate structure for distribution of profits, no board of directors, no meetings of creditors and shareholders. The IRS and the Small Business Administration to encourage people to form a for-profit business rather than a sole proprietorship because of the benefits and stability they offer.