Business is an intrinsic part of capitalistic society, and indeed drives the way we work and consume. Business involves the creation or distribution of goods and services to buyers in a way that generates a profit for the business. One who starts a business is called an entrepreneur, and a business needs capital (initial money to invest in running the business), goals and objectives, a the means to implement the objectives.
A business model involves how the company sells products to customers, and while there are many different business models, the basic categories include manufacturer, distributor, retail and franchise. A manufacturer is a company which creates product from raw materials or assembles products from pre-manufactured parts. A distributor is a business which purchases products from a manufacturer for resail to retail businesses or to the public. A retail outlet is a business which purchases products from a distributor and then sells those products to the public, or the end users. A franchise business model involves purchasing a business (which may be a retail outlet, a manufacturer or a distributor) from a franchise company or franchise distributor.
There are several types of business ownership. These include sole proprietorship, partnership, corporation, cooperative (or co-op), and a limited liability company. A sole proprietorship is a for-profit enterprise with one owner who holds unlimited liability for debts incurred by the business. The owner of a sole proprietorship also owns all of the business's assets. The majority of small businesses begin as sole proprietorships, with the owner carrying on a daily function within the business. A partnership is a for-profit business owned by more than one person, and partnerships are classified as general partnerships, limited partnerships and limited liability partnerships. A corporation is a limited liability business which has members and a separate legal personality; corporations may be privately owned or government owned, for profit or not for profit. A co-op is a limited liability business that ban be either for profit or not for profit and has members which share in the decision making. A limited liability company has the limited liability of a corporation but the flexibility of a partnership, albeit a more formal partnership.
Different types of businesses include agriculture and mining (which produce raw materials), financial (which profit from managing and investing capital, information businesses, manufacturers, and real estate, and service businesses (which offer goods or services and charge for labor), transportation, and utilities (which produce public services such as water treatment).