Types of Businesses Quiz

Business Types and Characteristics

• A business involves economic activity with the intention of making a profit through the production, sourcing, purchase, and sale of goods and services.
• Businesses share trade-related characteristics, an economic or social motive, the presence of an entrepreneur, regular transactions, and uncertainty.
• Manufacturing, service, merchandising, trading, and hybrid businesses are the five types of businesses.
• Manufacturing businesses convert raw materials into finished products.
• Service businesses provide services to clients, such as transportation and hospitality.
• Merchandising businesses purchase finished goods and resell them to customers.
• Trading businesses resell products without maintaining an inventory, such as real estate brokers and importers.
• Hybrid businesses combine various organizational patterns to create goods and/or services.
• Businesses can also be categorized based on size, such as micro, small, and medium enterprises.
• Legal forms of businesses include sole proprietorship, one person company, partnership, limited liability partnership, and company.
• Companies can be public or private, and individuals have limited liability.
• Businesses can also be categorized based on sector, such as the primary sector (extracting raw materials) and the secondary sector (manufacturing goods).