Types of Small Businesses

A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. This business can be set up by a private individual using their own capital or through a loan obtained from the bank or from other lenders. He is in charge of all the decisions regarding the business and retains all profits made by the business.

There are different types of small businesses e.g.

Trade business:

A retail business involves the sale of goods or commodities in small quantities directly to the end consumers, where as a wholesaler or distributor sells consumer goods to retail businesses. Generally a trade business involves a shop front, either a physical location or a web site that relays largely on the consumers or customers being able to find the business and being willing to purchase the goods the business has on offer.

Financial business:

Financial businesses include banks and other companies that generate profit through investment and management of capital.

Agriculture and mining business:

These types of businesses are concerned with the production of raw material, such as plants or minerals.

Service business:

A Service Business is one in which income is produced chiefly by personal services rendered. The services can be personal in nature, such as providing a massage, life coaching, gardening or home maintenance. Or the services can be business services provided to other businesses. In a service business you are not selling physical goods, you are selling the service provider and what he or she can do for the client.

Real estate business:

Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.

Manufacturing business:

A Manufacturing Business is a business engaged in manufacturing (i.e. producing) a product, which involves applying a manufacturing process to raw materials in order to convert them into an end product. A manufacturing business is more likely to be located in an industrial area rather than in the center of town, and if the business has a shop front it is likely to be attached to the manufacturing plant, and only be a minor part of the business operations.