What Is Enterprise & Role of Enterprise
What is Enterprise?
Enterprise can be defined as a for-profit business or company; an entrepreneur runs that. Running an enterprise is quite involving and challenging or involves a kind of risk. A true entrepreneur makes things happen; they have energy, determination, and drive to overcome the hurdles and possible pitfalls associated with launching a new enterprise.
People who have entrepreneurial success are often referred to as “enterprising.”. An enterprising person has the imagination and astuteness to identify business opportunities that will satisfy consumer needs and fill gaps in the market.
Types of Enterprises
There are many forms of legal enterprises, with the most common globally are:
Sole proprietorship
A company runs by a single individual, typically for their benefit, with unlimited liability for any damages that occur due to the business’s operations.
Partnership
However, a business run by two or more individuals or entities who share ownership – not necessarily equal ownership.
Corporation
A for-profit entity created to shield the owner(s) from liability should the enterprise become subject to a lawsuit. There are different forms of corporations, depending on how many owners there are.
Limited Liability Company (LLC)
An LLC offers the legal protection of a corporation and the tax treatment of a partnership.
Professional Company/Professional Limited Liability Company (PC/PLLC)
PCs and PLLCs are for licensed professional firms, such as accountants, architects, engineers, doctors, and lawyers, and provide liability protection similar to a corporation.
Role of Enterprise
To Produce Goods and Services.
Unless there are entrepreneurs that are willing to start businesses that produced goods and services, either people would have to produce everything that they wanted themselves.
They would have to go without things, or that would be a significant burden on the government to produce everything that the population of on economy needs.
But by having entrepreneurs and enterprise, it relieves some of this burden from the government, entrepreneurs and starts their own business organizations that produce goods and services so that the government doesn’t have to produce everything.
Also, businesses and entrepreneurs can start organizations that help satisfy the wants and the needs of consumers.
If the government were the only producer of goods and services in an economy, they would have to focus on providing the basics like food and shelter and clothing and transportation, education, and health care.
Having enterprise in an economy, lots of different businesses can all start with their areas of specialization. While some might focus on producing essentials such as food, others focus on producing things that perhaps people don’t need. Still, they would quite like in their lives, like entertainment or fashionable clothing instead.
Enterprise plays a crucial role, increasing the range of available goods and services so that more customer needs and wants are met.
Creating Lots of Jobs employment
When entrepreneurs are doing this, they also create the benefit of creating lots of jobs and employment in an economy so people can afford to bar the goods and services that other businesses are producing.
Doing this requires a business to add value to entrepreneurs and start businesses because the potential of making a profit entices them.
To Add Value
Enterprise needs to add value, which is quite simply the process of creating something that customers are prepared to pay more for than it has cost an entrepreneur to produce.
How entrepreneurs might try to add value to a process creates something that’s worth more than it has cost to produce. The first thing entrepreneurs can offer to add value is:
Greater Convenience
We could all if we wished, sit at home, and makes our own car, but it’s far more convenient for us to purchase one produced by experts in a much shorter time, and people will pay for that convenience.
It might only cost £1000 to manufacture a car, but people may be prepared to pay £15,000 because of the convenience of having one made for you by experts.
Branding
Sometimes businesses can add value through their branding through their image through reputation.
Why people might be prepared to drive a Mercedes car rather than another manufacturer is because they’re attracted to the branding of that company they want to be associate it with the credibility, the reputation that a brand like Mercedes is able to offer, people are also drawn to pay more for the product than it might have cost produced.
Quality
Because of the quality level that the business has been able to achieve. The greater quality something is, the more benefits it offers consumers, or the more durable it is and the longer it lasts, the more people might be prepared to pay for it.
And so there might be the potential for businesses to add value by creating something that offers customers great quality and they’re prepared to pay far more for it than it has cost the business to produce.
Design & Functionality
Sometimes people are prepared to pay because of its design because the functionality of the features. It’s the reason why many people are drawn to buying iPhones by Apple is because of the design and the features and the functions that that product is able to offer them on
Though an iPhone may only cost £100 to produce, they can retail them for £1000. And add all of that value because people really value the design and functionality of that product.
Unique Selling Point
Another way of adding the most amount of value is by offering consumers what’s known as a unique selling point, USP, something that your product offers consumers that no other products on the marketplace can offer.
The first business that is able to retail cars with driverless technology will have a unique selling point.
It’s likely that they will be able to sell those cars at a much higher price point than they have cost to produce because they are offering something unique. They are the only business that you can buy from the offers you that particular feature.
The Role of Entrepreneurs in Business.
What is the role of entrepreneurs in an enterprise?
Entrepreneurs Organize Resource
Organize Resource is when they’re running businesses, they bring together known is different factors of production.
They bring together the land. Entrepreneurs bring together labor from the workers, the capital, finance, machinery, and equipment. They use all of these factors to produce the goods on services that on economy relies up.
Entrepreneurs Make Decisions.
Entrepreneurs decide what to produce, and in conjunction with consumers, they decide how much to produce.
Entrepreneurs decide what prices they’re going to try and retail their products up. They decide when new products are going to be launched.
They decide when the product might have become obsolete. So, entrepreneurs fulfilled the role of really responding to markets, responding to customers to make decisions about what’s going to be sold on what needs and wants might be emerging that they are going to try and satisfy.
Entrepreneurs Take Risks
The other role the entrepreneurs provide is that they are prepared to take risks, whilst many offices are happy to earn a wage or a salary through having a job.
Entrepreneurs are prepared to pursue business ideas, produce goods and services in society, invest their own capital, and stake their own money on a business idea.
We need entrepreneurs in society, the people who are will bring resources together and make decisions about what will be produced and risk their own finance to pursue a business idea.
