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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