1. Objective: Classify businesses as profit-making or non profit- making; and service, product or combination. Classifying Businesses

2.   For-profit businesses  Motive is making a profit (earning more revenue than expenses)  Produce, distribute or sell goods and/or services based on consumer demand  Examples  Apple Computer  Sony  Domino’s Pizza  The Gap  Abercrombie and Fitch Profit-making Businesses

3.   Not-for-profit businesses  Can earn a profit, but cannot be run for the sole purpose of earning a profit; profits must be used to benefit the purpose of the organization  Cannot be run for the financial gain of the members or directors  Donors’ Contributions are tax deductible  Examples  American Red Cross  Salvation Army  Homeless Shelters  St. Jude’s Children’s Hospital  Government Organizations Not-for-Profit Businesses

4.   Provide services rather than goods  Provide to people or other businesses  Some service businesses meet needs (medical clinics, law firms)  Some service businesses provide wants (taxi companies, ISPs)  Examples  Barber shop  Dry Cleaners  Plumber  Car repair shops Service Businesses

5.   Sell goods to consumers and other businesses  Retailers and distributors are goods businesses  Examples  Old Navy  Harris Teeter  Best Buy  Dick’s Sporting Goods Goods Businesses

6.   Some businesses are both goods and service businesses— they sell a good and provide a service.  Examples  Automobile dealerships  Hair salons  Appliance stores  Can you think of others? Combination Goods and Service