Types of Businesses

Producers A person or business enterprise that generates goods or services from the development of raw material to the finished product Example Restaurant

Raw Goods Producer Extract raw materials for use in usable products Example Farmer Miner

Manufactures Takes raw materials from outside the company and turns them into a form that consumers can use Examples Textile mill – turns cotton into yarn and then to cloth Automobile plant – General Motors

Trade Industries Service Producing Industry – Provide task or a service for money. Healthcare facility Insurance company Retail Stores Goods Producing Industry – Provide a tangible item for money. (something you can touch and take with you) Manufacturing Mining Agriculture

Retailers The final business organization in an indirect channel of distribution Types Department Store - Dillards Discount Store - Target Specialty Store – Foot Locker Super Market – Brookshire Brothers Convenience Store – Stop and Go Specialty Superstore – Home Depot Factory Outlet - Nike Hypermarket - Costco Non-store (online)Shopping - Amazon Retailers are the final business organization in an indirect channel of distribution. They provide products to the customer through many different types of stores. One category for retailers includes the product mix which identifies the store based on the items sold. Another category indicates the type of retailer based on location. Each of these meets a market and provides the goods desired by the customer.

Wholesalers Companies that assist with the distribution activities between businesses Examples: United Distributing (food) FTD (florist) Sam’s Club

Service Business A business firm that does things for the consumer Examples Airline – Southwest Moving Company – Mayflower Hair stylist

Private Enterprise Individual owned business with limited government direction Businesses decide what to produce Consumers decide what to purchase Government regulates unfair business practices Since a pure market economy does not exist, most countries with limited government influence refer to their economy as a private enterprise. The United States is the best example of this type of economy with the limited amount of government intervention. Since a pure market economy does not exist, most countries with limited government influence refer to their economy as a private enterprise. The United States is the best example of this type of economy with the limited amount of government intervention.

Forms of Business Ownership Sole Proprietorship Individuals who want to work and make decisions independently Little government regulation Great risk for the owner More than 50% fail in the first year. Ask students to list a business that they would feel comfortable operating as a sole proprietor. Then ask students to explain why they are qualified.   UNT in partnership with TEA, Copyright ©. All rights reserved 5

Forms of Business Ownership Partnership The partnership is owned and controlled by two or more people. Partners share an idea for a business. Partners want to cooperate in managing and investing, and want to share the risks and rewards of the business. Disadvantages include unlimited liability, uncertain life, and disputes among the partners. Unlimited Liability – full legal and financial responsibility for a business. Ask students to list the risks involved with partnerships. Explain how partners have unlimited liability in the partnership. Unlimited liability-full legal and financial responsibility for a business

Forms of Business Ownership Corporation Separate legal entity owned by one or more shareholders (or stockholders) and managed by a board of directors Most complex and difficult to form Subject to more regulations Limited liability for investors – profits and losses are generated through the corporation’s operations. Can live beyond the life spans of its owners because ownership can be transferred through a sales or gift of shares. Stock – shares of ownership in a corporation. Corporation-a business treated by law as separate from its owners. Ask students to list three corporations that they think are good investment choices. Later they can look up the most current stock price for each corporation on the internet on listed in the newspaper.