Business Type

There are three general business types. Namely manufacturing, trading and service enterprises.

MANUFACTURING BUSINESS

A manufacturing business involves the processing of raw materials and the production of finished goods or other forms of raw material. An advantage of a manufacturing business is that occasionally certain Government incentives are made available, provided the necessary requirements are met.

In establishing a new manufacturing business an entrepreneur must face and overcome range of constraints. One such constraint is access to capital. Other issues to consider.

include the availability of a suitable site, suitable premises, adequate raw materials, appropriate infrastructure, distance from suppliers and markets and the necessary production expertise.

TRADING BUSINESS

A trading business involves the buying and selling of already manufactured goods to the benefit of end-user customers. Very few special Government incentives are made available to entrepreneurs active in this sector.

An advantage of operating a trading business is that detailed technical knowledge is unnecessary, although an above average general knowledge of products is vital. It is generally considered that establishing a trading business is not as complex as launching a manufacturing concern.

SERVICE BUSINESS

A service business is any business concerned with the supply of a service to customers, such as the provision of personal advice, based on some special knowledge. A service business is normally the simplest and most inexpensive to launch, and would include such activities as business consulting, book-keeping and accounting, plumbing, carpentry and the like.

Entrepreneurship is defined as: “The pursuit of opportunity without regard to resources currently controlled”. Entrepreneurship is thus synonymous with the bearing of risk and application of innovation. Entering business inevitably carries – degree of risk, which may be offset through an understanding of problems and constraints associated with entrepreneurship.

In identifying which business type to pursue, it is necessary to evaluate one’s knowledge, skills, and interests within a particular business environment.