an entity that is an organization that uses economic resources or inputs to provide goods or services to customers in exchange for money or othergoods and services.
3 major types of business
Service
Merchandising
Manufacturing
Service business
type of business that provides intangible products (products with no physical form).
A service type firms offer professional skills, expertise, advice and other similar products.
They do not sell goods.
Examples of service business
Schools
Repair shops
Hair Salons
Banks
Law firms
Merchandising business
The type of business that buys products at wholesale price and sells the same at retail price.
Known as “buy and sell” businesses.
They make profit by selling the products at prices higher than their purchase costs.
A merchandising business sells a product without changing its form.
Examples of merchandising business
Grocery stores
Convenience stores
Distributors
Other resellers
Manufacturing business
Unlike merchandising business, a manufacturing business buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased.
combines raw materials, labor and factory overhead in its production process. The manufactured goods will then be sold to customers.
