Launch your LLC, corporation, or nonprofit starting at $0 + state fees

Suit Up: Find The Business Type That Fits Best

Updated October 30, 2022
In this article
Share this guide

Suppose you are weighing the idea of starting a business — there will be a number of decisions to make, from writing a solid business plan to settling on your ideal business model to choosing the right business structure. Beyond that, your tasks include naming your new business, filing paperwork, getting set up with taxes, securing needed permits and licenses, and then marketing your company to attract customers.

But before your brain gets too overwhelmed with information overload, you also need to consider what type of business you want to operate. There are three main business types that all companies, no matter their size or location, fall under:

  • Service

  • Merchanding

  • Manufacturing  

At Your Service

Service businesses are among the most popular small businesses out there. Depending on which website you review of the most popular small businesses, anywhere from 60% to 80% of the list is comprised of service businesses.

The simplest definition of a service business is a business that provides a service. More specifically, a service business does not provide any physical goods. Instead of clothing or electronics or toys, your skills/expertise/advice are your “goods.”

Example Service Businesses

  • Law firm

  • Accounting firm

  • Human resources company

  • Computer repair store

  • Bank or financial planning/investing

  • Auto repair shop

  • Physical trainer

  • Hair/nail salon

Most freelance contractors are also in the service business — business:

  • Social media managers

  • Copywriters

  • Web designers

  • IT support

  • Photographers

  • Interior designers

  • Landscapers

What about the emerging sharing economy businesses? That may seem a little tricky since a physical “good” is involved, but consider what takes place — the vehicle of the rideshare driver is not being sold, but rather, a service is provided of taking a customer from Point A to Point B. Most sharing economy businesses fall under the definition of a service business.

The line where your new business falls might seem fuzzy; however, just remember that if physical goods are not exchanged and you perform any kind of service for which you are paid, you have a service business.  

Get in the Middle of Things

Merchandising businesses comprise most of the more well-known companies in the US — Macy’s, Wal-Mart, Target, Barnes & Noble, Whole Foods, and even Amazon.

The definition of a merchandising business is one that buys completely made products from a resells to consumers (for a profit). Merchandising businesses are the middlemen between the product maker and the buyer. The hallmark of a merchandising business is that it sells a completed product — businesses that are strictly merchandisers do not also manufacture the products.

Types of Merchandising Businesses:

  • Wholesale = buys items in bulk from the product maker/manufacturer and sells to retailers or other wholesalers

  • Retail = buys items from either the manufacturer or wholesaler and sells to consumers

Wholesale merchandisers rarely conduct business directly with consumers; likewise, retail merchandisers (especially large companies) deal with a wholesaler more than the actual manufacturer. The primary mission of the merchandising business is to sell the products made by the manufacturer.  

Build - a - Business

Manufacturing businesses — the makers of the products s, old by merchandising businesses — are the vital piece to the consumer economic puzzle. The primary role of the manufacturer is to make the stuff that will ultimately be purchased by consumers.

Sometimes the manufacturing business is an independent entity, and sometimes the product maker is connected to the merchandiser — like Ford, General Motors, and Fiat Chrysler. The manufacturing part is separated from the retail part, by both sections are owned by the same major corporation. But still, the actual builders of the vehicles do not also sell the finished products.

Flowers Foods is a good example of a manufacturing business. Keebler, Tasty Kake, and Dave’s Killer Bread are some notable product lines all owned and produced by Flowers Foods. The company makes the baked goods and pass on to the first of two “middlemen.” Independent vendors buy in bulk from Flowers and sell to stores, who in turn, sell to customers. Flowers makes the product but does not sell it.

Well-known manufacturing businesses include:

  • General Electric

  • Samsung

  • Johnson & Johnson

  • IBM

  • PepsiCo

  • Proctor & Gamble

  • Christian Dior

While the term “manufacturer” may sound more mechanical and technical, any business that focuses on the making of physical products is a manufacturing business. This can relate to jewelry and clothing as much to electronics and machines.

Starting a manufacturing business is not as difficult as it may seem, and you may be able to begin the business from your home.

Manufacturing Business Ideas:

  • Baking

  • Jewelry making

  • Candle/Incense making

  • Clothing design

  • Furniture design

  • Growing produce

The key factors of manufacturing businesses are combining raw materials with manual labor to produce a sellable product.  

The Hybrids

Some businesses are a combination of service and merchandising or merchandising and manufacturing, or even all three business types.

Firestone is a prime example of a triple hybrid business — they perform services for customers where goods may/may not be exchanged, but they also sell physical goods (tires and rims). And while Firestone sells other brands of tires, they also make their own brand of tire.

Grocery stores with in-house bakeries could qualify as a hybrid business. Of course, some companies, like Walmart and HEB, also have their own product lines as well. Texas-based HEB oversees at least thirteen manufacturing facilities across the state.

Many small businesses owners may find themselves wearing two or three business hats in the beginning — you make and sell your own clothing or jewelry. Or perhaps you fix computers and sell electronic components to your clients. Hybrid businesses are probably the most popular of the business types.  

In Closing

Your business idea does not have to fit into only one category, and you are far more prepared if you cover these basics in the beginning. Deciding what type of business you will have is one of the first steps in creating your business plan. Your next big decision will be selecting a business entity (c-corp or LLC) and filing the necessary paperwork to make your company a real thing. When you are ready for that part, let Swyft Filings give you a hand.

Related Articles:

Originally published on October 30, 2022, and last edited on October 30, 2022.

Frequently Asked Questions

Looking for answers? You came to the right place. To learn more about our company mission and culture, click the link below.

Life at Swyft
How much does it cost to form a Corporation or LLC?

Swyft Filings charges $0 and only the state filing fees to incorporate your business. Filing fees vary from state to state. If you have a question about a specific state, feel free to email or contact us at 877-777-0450.

After completing my order, will I have to pay additional fees to your company?

No. For business filings, you paid the total price for your order at the time you placed it. 

However, if you signed up for the Swyft Filings Registered Agent Service, you will be charged for this service when the state grants your company a Certificate of Formation. This recurring fee will be automatically charged to your account for each period the service is active unless you change your Registered Agent with the State or dissolve your company.

When will my order be processed?

Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.

How long does the incorporation process take?

Incorporation times vary from state to state. Feel free to contact us by email or at 877-777-0450 for information on specific state processing times.

Swyft Blog

Everything you need to know about starting your business.

Each and every one of our customers is assigned a personal Business Specialist. You have their direct phone number and email. Have questions? Just call your personal Business Specialist. No need to wait in a pool of phone calls.

Blog Card Image
Managing Your Business

The Role of Nonprofits During a Pandemic

Swyft Filings is a business formation service that automates the filing process for entrepreneurs, making it easier to get their LLC, C corp, S corp, or nonprofit off the ground. Since 2015, we've helped over 300,000 businesses incorporate.
Blog Card Image
Preparing to Launch

How to Start a Nonprofit in 8 Steps

Swyft Filings is a business formation service that automates the filing process for entrepreneurs, making it easier to get their LLC, C corp, S corp, or nonprofit off the ground. Since 2015, we've helped over 300,000 businesses incorporate.
Saving the World Isn't Easy: Avoiding Burnout in Nonprofits
Managing Your Business

Saving the World Isn't Easy: Avoiding Burnout in Nonprofits

Swyft Filings is a business formation service that automates the filing process for entrepreneurs, making it easier to get their LLC, C corp, S corp, or nonprofit off the ground. Since 2015, we've helped over 300,000 businesses incorporate.
Corporate Giving: How to Keep Your Nonprofit Compliant
Managing Your Business

Corporate Giving: How to Keep Your Nonprofit Compliant

Swyft Filings is a business formation service that automates the filing process for entrepreneurs, making it easier to get their LLC, C corp, S corp, or nonprofit off the ground. Since 2015, we've helped over 300,000 businesses incorporate.
Business Owner Using Computer | Swyft Filings
Preparing to Launch

What Happens When You Submit Your Swyft Filings Application

Incorporating your business but unsure of what comes next? Our guide walks you through the process from document prep to filing.
Setting Up Business Credit
Managing Your Business

How to Get an EIN to Open a Business Bank Account

In most cases, you need an employer identification number to open a business bank account. Follow these steps to get an EIN for your business banking needs.

Do what you love. We'll handle the paperwork.

Trusted by over 250,000 businesses since 2015. Start your business with confidence. Affordable. Fast. Simple.

Incorporate now
Dummy Switchback Image