Types of Business


A establishment is an organization that utilises economic resources or inputs to provide goods or services to customers in exchange for money or other goods and services.

Types of Business in India:

In a broad sense, there may be three forms of business organizations:

  • Manufacturing Business
  • Service Business
  • Trading Business

Manufacturing Business:

A manufacturing business buys materials to use as raw materials in making a product which is quite different from the raw materials used. Thus, there is a transformation of materials. The transformation process exists in between the input raw materials and output finished goods. This transformation process is also termed the ‘production process‘.

A business organization engaged in manufacturing activities combine raw materials, labour and factory overhead in its production process. The manufactured goods are then sold to customers. Some of the major manufacturing businesses are India are –

1. Ashok Leyland

2. Bajaj Auto

3. Hero Honda Motors Ltd.

4. Apollo Tyres

5. Asian Paints

6. TATA Group

7. Larsen & Toubro

8. Jindal Steel

9. Hindusthan Unilever Limited

10. Mosor Baer

11. Godrej Group

12. Raymond Group

13. Dabur India Limited

14. Cadila Healthcare

Service Business:

While the products of a manufacturing business are tangible. The products have definite physical forms, and a service type of business provides intangible products and products with no physical form. Service-type firms offer professional skills, expertise, advice and other similar products.

Example: Bank, Insurance, Educational Institutes, Automobile or even mobile repair shops, hair salons, audit firms and solicitor firms, etc.

Trading Business:

This type of business buys products at wholesale price and then sells the same at retail price. These are known as “buying and selling” businesses. They make a profit by selling the products at prices higher than their procurement costs. A trading or merchandising business sells a product without changing its form.

Example: Mobile phone stores, stationery stores, spare parts stores, distributors of any kind like pharmaceutical-writing instruments, construction, hospitality, etc.