3.1 Types of Businesses

3.1 Types of Businesses Identify the four main types of business Examine trends in business startups in recent decades Explore growth expectations for business

Types of Businesses A manufacturing business (manufacturer) converts materials into goods suitable for use and then sells those goods to others. A wholesaling business (wholesaler) buys goods in large quantities, typically from manufacturers, and resells them in smaller batches to retailers. (known as the middleman) A retailing business (retailer) buys goods, often from wholesalers, and resells them directly to consumers, who are the end buyers. A service business provides services to customers for a fee.

Trends in Business Startups Over the past fifty years, the business make-up of the United States has changed significantly. In the 1950s, the country’s dominant industry was manufacturing. During the 1950s and 1960s, America experienced a boom in franchising. By 1970, service, wholesale, and retail businesses accounted for the majority of America’s economic production. The vast majority of businesses started in the 2000s have been service and trade businesses. 4

Franchise Can you think of others? An arrangement in which an established company sells the right for others to use the company’s name and operating plan to sell products or services. McDonald’s Zaxby’s Chick-Fil-A Domino’s Can you think of others?

Businesses of the Future The U.S. Department of Labor makes predictions on which industries will likely experience the largest growth in number of employees in the following decade using the The North American Industry Classification System (NAICS). The top ten companies have one thing in common—they provide some type of service. This demonstrates that service businesses are expected to dominate the U.S. economy through 2020. 6