Business matters to the world economy. For example, it helps people to produce, distribute, provide services, and make profits. In this article, we would like to describe the manufacturing and commercial business and their features.
Manufacturing business
Production activity is leading among all types of entrepreneurship. Production is the production of goods, the performance of work, the provision of services, and the dissemination of information to consumers. In addition, production activity consists of several factors, such as:
- production of food products and construction materials;
- agricultural work;
- providing telephone services and transportation.
An entrepreneur can purchase goods with his money or with a loan. We must consider whether an entrepreneur can benefit from a grant, subsidy, or financial assistance if the state has a full-fledged support program for start-up entrepreneurs. The company produces a particular product or service for its sale.
This sale takes place in exchange for goods or services respectively, as well as for money. At the beginning of the activity, the entrepreneur decides which goods he will produce and sell or what services he will provide. After that, he will perform the next step, such as starting the production of goods or providing services.
This step includes several necessary factors:
- state registration;
- purchase or lease of premises, equipment, and raw materials;
- searching for employees;
- ordering goods or services which are necessary for the activity and that the entrepreneur is not able to produce;
- tax payment.
The production company must understand that it should run marketing activities and identify the presence of demand for a product or service to attract many potential customers to the range of its products. After engaging the client, the company should check his solvency and good faith and conclude a contract with him containing all the transaction terms.
This is typical of production organizations that sell goods or provide services to other production companies. If goods and services are produced for consumers, then there is one difference. The fact is that participants do not conclude a contract in writing, as a rule. In the case of a bakery, the consumer will receive a check instead of a contract.
Commercial business
The main difference between commercial and manufacturing businesses is the lack of production. If it is a retail business, the entrepreneur does not produce anything, but he implements the finished product. Other issues are that the entrepreneur should register his professional activities in the state register.
Then, the entrepreneur has to find employees and organise advertising campaigns. You can differ the whole business into two groups:
- trade in goods, such as the acquisition of goods by an entrepreneur and their resale;
- mediation, such as representation by the seller or customer in creating a contract for the sale of goods.
There are two types of trading such as wholesale and retail ones. Wholesale trade is the movement of goods from the producer to the entrepreneur when the goods arrive at the entrepreneur in bulk. Retail trade transfers goods to the final consumer in single copies. The first type implies a wholesale base, and the second is a supermarket.
Any business activity is an essential link in the economy of a particular state. Modern society understands the impact of business. The fact that manufacturers of goods and providers of services provide goods of primary necessity and other material benefits to a country’s population.
