5 Types/Forms of Businesses

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5 Types/Forms of Businesses

Franchise

The inflexible nature of a franchise may restrict your ability to introduce changes to the business to respond to the market

All profits (a percentage of sales) are usually shared with the franchisor.

You may find it difficult to sell your franchise - you can only sell it to someone approved by the franchisor.

Other franchisees could give the brand a bad reputation, so the recruitment process needs to be thorough.

The franchisor might go out of business.

You may find that after some time, ongoing franchisor monitoring becomes intrusive.

The franchise agreement usually includes restrictions on how you can run the business. You might not be able to make changes to suit your local market.

Costs may be higher than you expect.

Pentration of secondary and tertiary market.

Improved Valuation.

Increased Profitability.

Ease of Supervision.

Staffing Leverage.

Speed of Growth.

Motivated Management.

Capital. The most common barrier to expansion faced by today's small businesses is the lack of access to capital.

Advantages & Disadvantages:

A continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration.

Disadvantages

Independent management.

Double taxation. Depending on the type of corporation, it may pay taxes on its income, after which shareholders pay taxes on any dividends received, so income can be taxed twice.

Excessive tax filings.

Advantages

Corporations have perpetual lifetimes.

Easy to transfer ownership.

Easier to raise capital. It is easier to attract capital with the sale of stocks and bonds. A corporation can have an unlimited number of investors.

Owners have limited liability. The owners' assets are protected from the debts and liabilities of the corporation. Shareholders are not held liable for business losses.

Advantages & Disvantages

A type of organization that is both owned and controlled by its members, who also happen to use the services and products of the cooperative

Corporation

Disadvantages: Double taxation. Depending on the type of corporation, it may pay taxes on its income, after which shareholders pay taxes on any dividends received, so income can be taxed twice.

Advantages: Owners have limited liability. The owners' assets are protected from the debts and liabilities of the corporation. Shareholders are not held liable for business losses.

a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.

Partnership

Disadvantages: Partnership disputes, unlimited liability, and shared profits.

Advantages: More resources and talents come with an increase in partners, and the business can continue even after the absence of a partner. Easier to establish and start-up costs lower than working alone.

A partnership is an association or relationship between two or more individuals, corporations, trusts, or partnerships that join together to carry on a trade or business.

Sole Proprietorship

Disadvantages:

Raising capital is difficult.

Business continuity ends with the death or departure of the owner.

Owners are fully liable. If business debts become overwhelming, the individual owner's finances will be impacted.

Advantages:

Simplified tax reporting.

Minimal reporting requirements.

Self-employment taxes apply to sole proprietorships.

Privacy.

A simplified and less expensive business organization.

Having control over your own business.

An unincorporated business that is owned by one individual. It is the simplest kind of business structure.

E-Commerce

Disadvantages: Anyone, whether good or bad, can start a business with ease. And there are many bad places that fool the consumers. If a customer needs help, unlike physical stores they can't ask for help since the offer support is only during specific hours.

Advantages: Procedure for quick buying/selling, and easier to find items. Open all the time 24/7 Buy / Sell. run quickly unlike physical stores that get slowed down by shoppers. Low operating costs, and improved service efficiency.

Advantages & disadvantages:

E commerce is the purchase and sale of goods and services, or the transfer of funds or data, through an electronic network, mainly the Internet.

Non-Profit

Disadvantages: Limited purposes: A nonprofit organization can only perform those functions specified in those laws in order to be exempted under the tax laws. Continued Maintenance: All charities must file annual reports and comply with all incorporation rules.

Advantage: Nonprofits enjoy the benefits of tax-exempt status They are seen by the public as a positive light. A Lot of people tend to volunteer to help the non-profit corporation.

• Nonprofits enjoy the benefits of tax-exempt status
• They are seen by the public as a positive light.
• A Lot of people tend to volunteer to help the non-profit corporation.

A corporation or an association that runs a business for the benefit of the general public without shareholders and without a profit motive.

Merchandising

Disadvantages: Changing layout and space – You may need to spend time rearranging aisles, shelves, display fittings and the general layout of the retail space within. A large number of competitors, because they’re a lot of big businesses.

Advantages: Increase sales Increase customers, Increased brand recognition

Advantages & disadvantages

Merchandising is a business that purchases finished products and resells them.

Manufacturing

Disadvantages: To start a manufacturing business it costs a lot Manufacturing Start-up: A Costly Proposition. It requires extensive planning, which can involve creating detailed designs and schedules. High transportation costs

Advantages: React to market easy: This peaceful and efficient way of interaction helps companies to move quickly and easily through the phases of design, engineering, product development and production. If needed they can quickly change one of the areas and respond almost instantly to market changes.

Advantages & Disadvantages

Manufacturing is the production of goods by hand or by a machine which the business sells to a customer upon completion.

Service

Examples:

Disadvantages: Difficult Valuation: Your service business is more difficult to evaluate than a manufacturing or retail company.

Advantages: No inventory: When you sell a service you typically have no inventory whatsoever. Instead of buying and selling items, you are encouraging clients to make the most of your ability to create their lives easier.

Advantages & disvanatages

Service is the action of helping or doing something for someone.

Definition: