Classification of Business

Introduction to Business Classification

• Purpose: Understand types of businesses
• Importance of classification: Helps in identifying different business types.

Classification Basis

1. Ownership

   • Private Businesses: Owned by individuals, not by the government.
   • Public Businesses: Owned and operated by the government.
   • Examples:
     • Private: small businesses, local shops
     • Public: Bank of Ceylon, People's Bank, Sathosa

2. Intention/Objectives

   • For Profit Businesses: Aim to make profit (e.g., retail, manufacturing).
   • Non-Profit Businesses: Focus on charitable purposes (e.g., Wikipedia, Red Cross).

3. Nature of Production

   • Primary Businesses: Involved in extracting resources from nature.
     • Examples include farming, fishing, and mining.
   • Secondary Businesses: Involved in transforming raw materials into finished goods.
     • Manufacturing and construction.
       • Manufacturing: Changing forms of inputs (e.g., making biscuits from flour).
       • Construction: Building durable assets (e.g., roads, bridges).
   • Tertiary Businesses: Concerned with providing services.
     • Examples: banking, insurance, telecommunication, transport, warehousing.

Detailed Breakdown of Types of Businesses

Primary Businesses

• Subdivisions:
  1. Farming:
     • Cultivation (e.g., paddy, tea)
     • Forestry (collecting natural resources like honey)
     • Animal Production (livestock for meat, milk, eggs)
  2. Fishing: Extractions from water bodies.
  3. Mining: Extracts minerals/gems from the earth.

Secondary Businesses

• Manufacturing:

  • Transforming raw materials into finished products (e.g., shoes, garments).
  • Divided into:
    • Process: Altering material (e.g., biscuit manufacturing).
    • Assembly: Putting together components (e.g., car manufacturing).

• Construction: Building structures (e.g., buildings, bridges).

Tertiary Businesses

• Services:
  • Involves facilitation of trade and auxiliary services.
  • Can be divided into:
    • Trade: Exchange of goods/services for money (e.g., supermarkets, restaurants).
      • Wholesale: Selling in bulk for resale.
      • Retail: Selling to end consumers.
    • Auxiliary Services: Support services for trade (e.g., banking, insurance, transportation).

Conclusion

• Interrelationship between concepts:
  • Business = Industries (primary + secondary) + Commerce (trade + auxiliary services).
  • Classification helps in understanding the different sectors of business and their operations.

Class Activity

• Engage in revision of classifications and their examples: Primary, Secondary, Tertiary, and their subdivisions.
• Encourage interaction and feedback in learning.

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Note: Ensure to understand each classification and examples thoroughly as they are interconnected and essential for business studies.

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