Business is the process of creating and capturing value. All viable businesses are based on a business model that represents a method for creating value for customers and capturing this value as revenue in a competitive market. The following are the basic types of business.
A business that licenses a complete business. For example, a restaurant chain that provides everything required to open a restaurant location such as know-how, processes and branded products and services. This benefits the franchisor as they can expand profits without investing more capital.
Developing products and services that meet relatively unique customer needs. Business models based on the reuse of products and assets. This is a way for a small business to compete with far larger competitors that benefit from superior economies of scale. For example, a small local bakery that offers high quality wedding cakes.
A business that allows amateurs to access a market that was once exclusively controlled by professionals. For example, a video sharing site that allows anyone to monetize videos. This may compete with professionally produced television shows, music videos and movies. A broad category of commerce that includes any sale of goods or services that use digital channels.