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Determine The Type Of Business You Have

Determine The Type Of Business You Have

By Jake Watson

Find the business class listed below that most carefully matches your business. You will use the description that follows as a reference whenever you describe your personal business.

Warning

Each of the business categories requires different skills to run efficiently. Many small businesses involve one or two types of business in the same endeavor. But if your idea will involve you in several types of business, it may be too complicated for you to run efficiently. As a general rule, small businesses work best when their owners know exactly what they are about and strive for simplicity.

Retail. Retail businesses buy merchandise from a variety of wholesalers and sell it directly to consumers. Some retailers provide service and repair facilities, while most do not. Most retailers just take in the goods and mark up the price, sometimes doubling their purchase price to arrive at a sales price. Supermarkets, mail order catalog merchants, computer stores, dress shops, department stores and convenience marts are retailers.

Wholesale. Wholesalers buy merchandise from manufacturers or brokers and resell the items to merchants. Normally, a wholesaler maintains an inventory of a number of lines. A wholesaler normally doesn't promote to customers in order to avoid competing along with his retailer clients. Wholesalers generally provide delivery program and credit to customers. This kind of business is characterized by reduced gross profit margins (occasionally varying in between 15% and 33% from the wholesaler's selling cost) and higher inventory investment. Wholesalers usually buy in big tons and sell in smaller tons. Like merchants, they seldom make any modifications towards the products. Most wholesalers aren't well recognized to the general public.

Program. People with a particular skill sell it to customers or to other businesses, depending on the ability. The finish product of the program business is usually some kind of advice or the completion of the task. Occasionally, a program business sells products as an ancillary function. For example, a baby diaper cleaning program might also sell diapers and infant equipment. Program business customers usually arrive from repeats and referrals. It is common to possess to meet state licensing requirements. Hairdressers, carpet cleaners, consultants, house cleaners, accountants, building contractors and architects are examples of service businesses.

Manufacturing. Manufacturers assemble components or process raw materials into products usable by consumers or other businesses. This type of business ranges from an artisan who makes craft items to General Motors. The most difficult part of the manufacturing business is to find a product, or even better, a series of products, that have acceptance in the marketplace and generate a steady sales volume. Or, as one business person put it: "Production without sales is scrap."

Project development. Developers create and finish a saleable commodity by assembling resources for a one-time project. Normally, the developer knows the market value of the finished product before she begins work. When the project is complete, the developer sells her interest in the project, normally directly to the user or consumer.