TYPES OF BUSINESS ACCORDING TO ACTIVITIES

SERVICE BUSINESS
* Utilize their employees to provide intangible
products or services to customers
* Perform services for a fee
* These services include professional skills, advice, expertise
and other related products
* The major phases of their operating cycle include paying out
money for employees and other operating expenses, performing
the services, and collecting cash payments from customers

MERCHANDIZING BUSINESS * Sell tangible products

* Buys finished or almost finished goods from suppliers and resells
the same to customers
* The business cycle of a merchansiding business is typically longer
than that of ervice business. It starts with the purchase of goods to
be held forr esale, also known as inventory. It eventually sells the
inventory to customers, and the cycle ends with the receipt of cash
payments
* The purchase of inventory and its subsequent sales lengthen the cycle

MANUFACTURING BUSINESS * Relatively complicated organizations than service and merchandizing

businesses.
* Ceate their own products
* Use raw materials, compinents, or parts which are processed using
machines, computers, and labor to produce finished goods
* Similar to merchandizing businessses, they earn revenues primarily
from sale of their manufactured products.
* The products of manufacturing businesses can be sold directly to
the consumers, retailers, and other manufacturers