1. 1.03 Classify Businesses Objective 1.03 Classify businesses as profit- making or non profit-making; and service, product or combination.

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

3. Non Profit-making 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, pay employees, etc. 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, pay employees, etc. Are tax exempt Are tax exempt Cannot be run for the financial gain of the members or directors Cannot be run for the financial gain of the members or directors Donors’ Contributions are tax deductible Donors’ Contributions are tax deductible Examples Examples American Red Cross American Red Cross Salvation Army Salvation Army Meals on Wheels Meals on Wheels Homeless Shelters Homeless Shelters St. Jude’s Children’s Hospital St. Jude’s Children’s Hospital

4. Service Businesses Provide services rather than goods Provide services rather than goods Some service businesses meet needs (medical clinics, law firms) Some service businesses meet needs (medical clinics, law firms) Some service businesses provide wants (taxi companies, ISPs) Some service businesses provide wants (taxi companies, ISPs) Examples Examples Barber shop Barber shop Dry Cleaners Dry Cleaners Copy and Print Shops (Kinko’s) Copy and Print Shops (Kinko’s) Car repair shops Car repair shops

5. Product Businesses Sell goods to consumers and other businesses Sell goods to consumers and other businesses Retailers and distributors are product businesses Retailers and distributors are product businesses Examples Examples Old Navy Old Navy CD Stores CD Stores Best Buy Best Buy Dick’s Sporting Goods Dick’s Sporting Goods

6. Combination Product and Service Some businesses are both product and service businesses—they sell a product and provide a service. Some businesses are both product and service businesses—they sell a product and provide a service. Examples Examples Automobile dealerships Automobile dealerships Appliance stores Appliance stores Can you think of others? Can you think of others?