1.03 Classify Businesses1.03 Classify Businesses

Objective 1.03 Classify businesses as Objective 1.03 Classify businesses as profit-making or non profit-making; and profit-making or non profit-making; and service, product or combination.service, product or combination.

Profit-making BusinessesProfit-making Businesses

For-profit businessesFor-profit businesses Motive is making a profit (earning more Motive is making a profit (earning more

revenue than expenses)revenue than expenses) Produce and distribute goods and Produce and distribute goods and

services based on consumer demand for services based on consumer demand for wantswants

ExamplesExamples Apple ComputerApple Computer SonySony Domino’s PizzaDomino’s Pizza The GapThe Gap Abercrombie and FitchAbercrombie and Fitch

Non Profit-making Non Profit-making BusinessesBusinesses

Non-profit businessesNon-profit businesses Can earn a profit, but cannot be run for the Can earn a profit, but cannot be run for the

sole purpose of earning a profit; profits sole purpose of earning a profit; profits must be used to benefit the purpose of the must be used to benefit the purpose of the organizationorganization

Cannot be run for the financial gain of the Cannot be run for the financial gain of the members or directorsmembers or directors

Donors’ Contributions are tax deductibleDonors’ Contributions are tax deductible ExamplesExamples

American Red CrossAmerican Red Cross Salvation ArmySalvation Army Meals on WheelsMeals on Wheels Homeless SheltersHomeless Shelters St. Jude’s Children’s HospitalSt. Jude’s Children’s Hospital

Service BusinessesService Businesses

Provide services rather than goodsProvide services rather than goods Some service businesses meet needs Some service businesses meet needs

(medical clinics, law firms)(medical clinics, law firms) Some service businesses provide wants Some service businesses provide wants

(taxi companies, ISPs)(taxi companies, ISPs) ExamplesExamples

Barber shopBarber shop Dry CleanersDry Cleaners Copy and Print Shops (Kinko’s)Copy and Print Shops (Kinko’s) Car repair shopsCar repair shops

Product BusinessesProduct Businesses

Sell goods to consumers and other Sell goods to consumers and other businessesbusinesses

Retailers and distributors are product Retailers and distributors are product businessesbusinesses

ExamplesExamples Old NavyOld Navy CD StoresCD Stores Best BuyBest Buy Dick’s Sporting GoodsDick’s Sporting Goods

Combination Product and Combination Product and ServiceService

Some businesses are both product Some businesses are both product and service businesses—they sell a and service businesses—they sell a product and provide a service.product and provide a service.

ExamplesExamples Automobile dealershipsAutomobile dealerships Hair salonsHair salons Appliance storesAppliance stores Can you think of others?Can you think of others?