A business is an establishment or organization created with the objective of achieving economic, industrial, or professional profit. Businesses may be privately owned, government-operated, or non-profit in operation. Their goods and/or services are exchanged for revenue.
Types of Business
There are several ways to categorize businesses: based on legal structure, industry type, and the function that the enterprise is involved in. Among the more common types are:
- By Legal Structure
Sole Proprietorship – One individual owns and runs the business. The owner bears full personal responsibility for all the debts and liabilities.
Partnership – Owned by two or more people who agree to share profits, responsibilities, and liabilities.
Corporation (C Corp & S Corp) – A legal entity that has been incorporated separate from its owners providing protection from being liable but subject to monitoring and taxation.
Limited Liability Company – A hybrid structure providing flexibility in ownership and management protection against liability.
A cooperative is an association founded as a business owned by members to serve their common benefit. - By Industry
Service Businesses – Provide intangible products, such as consulting, healthcare, and finance.
Manufacturing Businesses – Produce tangible goods, including car-making and clothing firms.
Retail Businesses – Sell finished goods directly to consumers, such as supermarkets and online stores.
Technology Businesses – Engaged in software, hardware, and IT services, including software as a service (SaaS) companies and application development companies.
Types of Businesses by Size.
Businesses can also be categorized according to size and scale:
Small Businesses – Privately owned enterprises generally having fewer than 500 employees (local shops and freelancers).
Medium-Sized Businesses – Companies of relatively greater size and revenue that are, however, not thought of as being big corporations.
Large Corporations – Thousands of employees, multinational scope, and high revenue firms like Amazon and Apple.