Understanding the Three Types of Business Operations

Entrepreneurs must understand the three different types of business operations: service, marketing, and manufacturing. A service business revolves around providing customers with intangible goods, such as transportation, consultation, repair and professional services. Merchandising business operations involve buying products that are ready for sale and reselling them with a certain amount of profit. Manufacturing companies manipulate resources such as raw materials, labor, machines and transforming them into finished products that are ready to be sold to customers.

When it comes to a service business, there is no inventory to consider when calculating finances. This leaves more room for flexibility. On the other hand, merchandising operations require more expense accounts to be managed. Manufacturing companies must also consider the additional expenditure of its raw materials and the cost of goods sold.

Business operations refer to the activities that companies perform on a daily basis to increase the value of the company and make a profit. Employees help achieve company objectives by performing certain functions, such as marketing, accounting, manufacturing, etc. In addition to having an operations strategy, they must also have functional area strategies in finance, IT, sales, marketing, human resources, and possibly other departments depending on the type of business. Choosing the right type of business operation is essential for a company to function properly and productively. It is important to understand what business operation aligns with your company and the responsibilities involved.

With the right approach and strategy in place, businesses can optimize their activities to generate sufficient revenue to cover expenses and make profits for business owners.

Tina Roth
Tina Roth

Certified social media fan. Evil music maven. Professional travel evangelist. Hardcore food enthusiast. Passionate food expert. Infuriatingly humble tv scholar.

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