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 Motive is making a profit (earning more (earning more

revenue than expenses)revenue than expenses)

ExamplesExamples AppleApple GoogleGoogle Abercrombie and FitchAbercrombie and Fitch Harris TeeterHarris Teeter Great Wolf LodgeGreat Wolf Lodge

Non Profit-making Non Profit-making BusinessesBusinesses

Cannot be run for the sole purpose of Cannot be run for the sole purpose of earning a profitearning a profit IF they make a profit, it must be used to benefit IF they make a profit, it must be used to benefit

the purpose of the organizationthe purpose of the organization 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 firmsMedical clinics, law firms Some service businesses provide wants Some service businesses provide wants

Taxi companies, ISPsTaxi 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 FYEFYE DSWDSW

Combination Product and Combination Product and ServiceService

Some businesses are both Some businesses are both They sell a product AND provide a They sell a product AND provide a

serviceservice

ExamplesExamples Automobile dealershipsAutomobile dealerships Hair salonsHair salons Appliance stores (Sears, Home Depot)Appliance stores (Sears, Home Depot) Best BuyBest Buy