Understanding the different types of business operations is like learning how a game is played. A business operation involves what a business does, whether it offers a service, sells something, or does a bit of both. These operations are important because they show how a business makes money and help us track it using accounting rules.
There are three main types of business operations: service, merchandising, and manufacturing.
– this is a type of business that earns income by offering services rather than selling physical products. These businesses provide skills, expertise, or labor to meet customer needs, such as accounting services, beauty parlors, spas, repair shops, and delivery-focused services like couriers or food delivery.
– this type of business earns income by purchasing products or goods and reselling them to customers for profit. Examples include toy stores, traditional sari-sari stores, and various boutiques and shops found in malls and traditional marketplaces.
– this type of business creates products from raw materials and processes them into finished goods, such as a factory that makes cars or a bakery that makes bread. Factories and processors fall under this category, whether industrial (e.g., car manufacturing) or agricultural (e.g., poultry raising).
