BUSINESS ACCORDING TO ACTIVITIES

SERVICE BUSINESS
 This provides intangible goods or services to customers. It usually generates profit by charging for labor or other
services rendered to consumers, government or other companies.
 Intangible good is something that does not have a physical nature
 doesn’t have any inventory to take into account when computing for financials

MERCHANDISING BUSINESS
 This purchase products from other businesses or manufacturers and sell them to customers. Merchandising companies
usually have merchandising inventories in their current assets account. They usually generate profit by providing markup
price on their goods available for sale. These businesses include retailers and trading companies.
 A merchandising business sells a product without changing its form.

MANUFACTURING BUSINESS
 This converts raw materials, labors and overhead into finished products that are available for sale to customers.
 This converts raw materials, labors and overhead into finished products that are available for sale to customers.
 It buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of
the products purchased.
 A manufacturing business combines raw materials, labor, and factory overhead in its production process. The
manufactured goods will then be sold to customers.

OTHER BUSINESS
 This includes businesses that can’t be classified as service, merchandising or manufacturers. Examples are agriculture
and mining companies. These companies are engaged in producing or exploration of raw or natural materials, such as
plants and minerals.

TYPES OF INDUSTRIES
 Primary Industries
 Extract raw materials (which are natural products) from the land or sea e.g. oil, iron ore, timber, fish. Mining,
quarrying, fishing, forestry, and farming are all example of primary industries.

 Secondary Industries
 Involve the manufacture of raw materials, into another product by manual labour or machines.
 Secondary industries often use assembly lines

 Tertiary Industries Tertiary Industries (sometime referred to as Services industry)

 Neither produces a raw material nor makes a product.
 Instead they provide services to other people and industries.

 Quaternary Industries
 Involve the use of high tech industries.
 People who work for these companies are often highly qualified within their field of work.
 Research and development companies are the most common types of businesses in this sector.

All of the companies are linked in one way or another.

Example:
The raw material cotton is extracted by primary industries
The cotton may then be turned into an item of clothing in the secondary industry.
Tertiary industries may advertise the goods in magazines and newspapers.
The quaternary industry may involve the product being advertised or researched to check that the item of clothing meets
the standards that it claims too.