Business Communication | Types of Distribution Channel

b. TYPES OF DISTRIBUTION CHANNEL

At the time of formation a business it is decided as to what channel of distribution is to be selected . That is, the proprietor will decide to act as wholesaler, retailer, broker , importer , exporter , sole agent , intender , or distributor .The channel selection depends on his experience , the amount of capital, and the type of products to be dealt in , and many other criteria.

c. INTERNAL ORGANIZATION AND MANAGEMENT

To run a business systematically and efficiently it is necessary to draw up a proper  internal organization which requires to work out an organization chart . According to it, the firm is divided into several department , powers are delegated , responsibilities are fixed . Job description and job analysis are prepared to fix duties . In case of company a board of directors is formed .

NATURE OF BUSINESS

In starting a new business the businessman has to decide on the type and nature of business . The fields open to him are industrial , commercial , or service areas . He may choose manufacturing , wholesaling , retailing , brokerage , import or export . The selection decision will be based on the availability of capital , scope of business , his expertise and experience , nature of demand.

INFRA – STRUCTURE

Infrastructure provides a sound basis for all types of businesses. It includes basic installation and facilities , as road , power plant , transportation , and communication systems . Whether it is a manufacturing concern or service organization , wholesaling or retailing import or export , small or large business, all need infrastructure .

FUTURE OF BUSINESS

This factor should be considered separately and precisely . The factor of technology is of especial consideration because it is fast changing and renders almost daily existing products outdated and obsolete . Today ‘s products get outdated tomorrow . As past experience tells us that black and white TV , fountain pen , and radios have been replaced by color TV , ball pen or ceramic pen, and CD players respectively to quote only a few examples. New inventions , innovation are continuously coming up. Today ‘s technology reject ,yesterday’s . Consumer taste is also on the change . World affairs , local government policies have also became fairly risky. The business will have to go for tomorrow ‘s technology , not yesterday’s . And what ‘s future technology? The answer lies in research , eyeing on competition , and careful analysis of business condition , both local and abroad .

FINANCE/RASING CAPITAL

Finance is the core part  of business .Business finance includes capital ( owners’ equity), loan and retained earnings . Different types or business ownerships bring in capital differently . In sole proprietorship, it is the partners who invest capital . The company receives capital by selling its shares to founders and general public.

Finance is used in purchasing equipment , land , machinery , plant, merchandise , and raw materials . It is required to pay long-term liabilities , as mortgage or bond payable . A business enterprise has to meet other day  to day expenses, as salaries , prepaid insurance , interest , rent, and the like . Receivables and payables are also to be financed   

   

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