Types of Businesses

Types of businesses are classified based on their target customer base.

• B2C: Market involved, like HEB, emphasis on lowering costs to maximize profits, and will tune into volatile and competitive markets.

  • Longhaul: Long-distance transportation or services that cover extensive geographical areas.

  • Verticals (market segments): Market in which vendors offer goods and services to a specific industry with specialized needs, like Healthcare or Manufacturing.

  • B2C emphasizes customer satisfaction through keeping up with trends and introducing new, volatile marketplace.

  • B2C have diverse supply chains and strong manufacturing production through partnerships.

  • B2C distinguishes their brands in different settings.

  • B2C have 6-12 week business cycles, “just-in-time”.

• B2B: Primarily sell to businesses, like Boeing or Shopify.

  • B2B do not have volatile wants and desires.

  • B2B look for specific experience, employees, larger budget, separate sections under 1 name.

  • The bigger the business, the less volatile they are (establishment, price sensitivity, long-term considerations, economies of scale, diversification of resources).

  • B2B have 4-6 month business cycles, could even be 12+ months.

• B2G

  • B2G businesses are the most objective to where they allocate their money.

  • B2G risk is lowest because Congress legislation is predictable and profitable.

  • B2G have 6 month - yearlong business cycles due to the bidding process, approval/compliance, and contract execution.

To determine their type of business, entrepreneurs identify gaps and will behave differently according to buying cycles, values, metrics, regulations, the structure of their business to match their target audience.

• Public sector: Funded by tax dollars, e.g. schools, the Capitol, hospitals.

  • Entrepreneurship typically isn’t done in the public sector, because everything in the public sector requires laws to pass.

  • Lots of legal regulations in the public sector, e.g. taxing, hiring diversity, information disclosure, and political influence.

• Private sector: Funded by money that isn’t publicly owned (private ownership with private funds).

  • Private sector is more prone to competition and monopolization - free market.

  • Regulation debate of free market - does own money mean full profit or should we tax millionaires?

• Nonprofit: Cannot pay dividends because they must use surplus revenues to further achieve its mission.

  • Legal laws of nonprofits: 501 section of IRS tax code, tax-exempt status.

  • Donations of nonprofits must be given to specified purpose.