What are the different types of businesses? Owning businesses is not all fun. There are numerous things that one should know and be able to apprehend. There are so many different factors involved, too. The thing is that the business practices are not simple. They aren’t as simple as being able to provide goods to customers. They aren’t as simple as being able to provide services to customers. There are licenses that are required. There are so many regulations that should be followed. There are many types of businesses. First, you have to make sure that you know every one of these types of businesses before attempting to go to the deeper part. These types of businesses are single proprietorship, partnerships, corporations, franchises, and others.
Single proprietorship businesses are the types of businesses where there is a single person or entity running the business. Among all the other types, this is the oldest that is known. It is also the simplest one. That single person who owns the business does everything with regards to running the business. He makes the decisions. He also works in the business himself. This single person is also the one who will shoulder pretty much every expenses related to the business. However, all the profits go to him as well.
Partnerships are types of businesses wherein there are at least two people or more involved in running the business. These people, called the partners, share the responsibilities of the business. They also share the decision making, assets, and liabilities of the business. However, there are different types of partners. There are partners that are there for the finances, there are some who are there for the manpower, and even some who take care of the location.
Corporations are publicly shared types of businesses. Here, people are allowed to buy portions of the business, called stocks. The people who have stocks will own a portion of the company that is proportional to the amount he invested. Here, the owners of the business are called shareholders as the different people who bought stock share the company. When it comes to decision making and responsibilities, they share it too. The one who owns the biggest stock will be the one who will have the biggest say in the decision.
Private limited companies and public limited companies are subcategories of corporations. Private limited companies are those that are run by a single group who does not sell their stocks on the market. Examples of these are family owned businesses. Public limited companies are types of businesses are large businesses that are composed of an organization.
Lastly, we have franchises. Here, a successful business sells the name and the business model of his business to other entrepreneurs. It’s like establishing a new branch of a successful business. However, the owners are different. The main advantage of this is that since the business you have acquired is already successful, people go to your establishment. Most common examples of these are fast-food chains and restaurants. They are mostly owned by different people but they use the same products, services, name and business model.