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Chapter 1 - Enterprise

The document discusses key concepts related to enterprises and businesses. It defines enterprise as both a business and the actions of an entrepreneur starting a business. Entrepreneurs take risks to start businesses and are diverse people who share characteristics. Successful entrepreneurs can benefit businesses' stakeholders through job creation, larger orders for suppliers, and increased tax revenue. Businesses use factors of production like land, labor, capital and enterprise to turn inputs into outputs that consumers want. Adding value means selling outputs at a higher price than production costs to generate profits. Constraints limit how businesses operate and usually involve costs. Core business functions include accounting, operations, marketing, and human resources.

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katy
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78 views

Chapter 1 - Enterprise

The document discusses key concepts related to enterprises and businesses. It defines enterprise as both a business and the actions of an entrepreneur starting a business. Entrepreneurs take risks to start businesses and are diverse people who share characteristics. Successful entrepreneurs can benefit businesses' stakeholders through job creation, larger orders for suppliers, and increased tax revenue. Businesses use factors of production like land, labor, capital and enterprise to turn inputs into outputs that consumers want. Adding value means selling outputs at a higher price than production costs to generate profits. Constraints limit how businesses operate and usually involve costs. Core business functions include accounting, operations, marketing, and human resources.

Uploaded by

katy
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 1 - Enterprise and business

Enterprise

• 2 meaning
• First it is simply another term for ‘a business’
• Second it is used to refer to the actions of a risk taker who starts up their own business -
‘an enterprising person’, often referred to as an entrepreneur

Entrepreneur

• Different to self employed - often always wanted to run their own business
• They are a very diverse group of people who share similar characteristics

Successful entrepreneurs can bring a range of bene ts to the businesses


stakeholders:

• Employees- more people likely to employed, more secure jobs, better pay and conditions
• Suppliers- larger and more regular orders
• Government - tax revenue from sources such as income tax, corporation tax, national
insurance and VAT

Factors of production

• Using resources (inputs) a business can produce the products that consumers want to
buy (outputs)
• Essential inputs for a rm and their availability can affect the business and its
stakeholders - shortages of factor may increase the price
• Resources often refereed to as factors of production such as land, labour, capital and
enterprise
• Land - natural resources, minerals, what can be grown on it

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• Labour - all of the human resources available, whatever the age and skill of the worke
• Capital - buildings, machinery and tools rather than money
• Enterprise

Adding value

• Means that a business can sell the product at a price that is higher than the cost of
producing i
• Extras that can be added so that are above the additional cost result in value added
• Value added: what a business achieves by ensuring that the price of the nished good or
service is in excess of the cost of inputs

Constraints on a business

• A constraint is a restraining factor on a


business which limits how a business
operates
• Usually involves a cost, which is paid
directly on indirectly

Functions within a busines

1) Accounting and nance - monitors and controls the businesses nancial resources
2) Operations management - refers to designing and controlling the process of production
3) Marketing - conducting market research and attempting to satisfy consumers needs
4) Human resources - responsible for employees including training and recruitment

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