A business enterprise is a for-profit entity. There are different ways a business enterprise can be organized for legal and tax purposes. Whatever the structure, the common element is the for-profit aspect.
A business enterprise is the undertaking of activities associated with the production, sale or distribution of products or services. A business enterprise can be operated as a sole proprietorship, partnership, corporation, limited liability company or other type of business association.
The Meaning of "Enterprise"
Look up "enterprise" in the dictionary and you'll find it has several meanings. It can refer to a for-profit business. It can also refer to a human skill, particularly as it applies to doing something new and clever. Finally, an "enterprise" can mean a difficult or important challenge, such as scaling Mount Everest.
In the fictional series Star Trek, the USS Enterprise (also called the Starship Enterprise) was willing to go where no one had gone before. That spirit of determination and the willingness to take risks often characterize a business enterprise. Think of famous entrepreneurs such as Bill Gates, Steve Jobs and Jeff Bezos. Their business enterprises created new markets with innovative products and services that continue to be enormously profitable.
The Need for Entrepreneurs
According to some economic theory, entrepreneurs are not needed in perfectly competitive markets. In perfectly competitive markets, all business people would have perfect knowledge and thus there would be no risk attached to economic transactions. Of course the world, and competitive markets, are imperfect places. Entrepreneurs can generate profits with business enterprises that launch new products or services, or exploit the market in a new way.
Creating a Business Enterprise
A business enterprise does not have to be on the scale of Microsoft, Apple or Amazon. A business enterprise can be run by a single individual or can refer to a small company with a handful of employees. The distinction of an enterprise is that it is a for-profit venture. The business enterprise exists to make money providing customers with products or services.
Develop a Business Plan
If you have an idea for a business enterprise, formalize it by creating a detailed business plan in writing. A business plan will give structure to the essential elements of your enterprise. It's a necessary document if you want to attract investors or secure financing. Look online for business plan templates to get started.
A traditional business plan usually contains these elements:
- Executive Summary
- Company Description
- Market Analysis
- Organizational Structure
- Service or Product Line
- Marketing and Sales
- Funding Request
- Financial Projections
Open for Business
After you've selected a name and location for your business enterprise, find out if you need to register with state and federal authorities. A local office of the U.S. Small Business Administration can offer guidance or visit the SBA's website for more information.
Get federal and state tax ID numbers. Open a business bank account and get business insurance. If you have a business name, brand or product that you want to trademark, you need to file paperwork with the United States Patent and Trademark Office.
Manage and Grow Your Enterprise
Managing your business enterprise encompasses a wide range of activities, including hiring and managing employees, handling financial operations and paying taxes, staying legally compliant, keeping abreast of industry trends, being vigilant about cybersecurity and being prepared for emergencies. The complexity of any of these activities depends on the type and size of your business.
When you're ready to grow your business enterprise, you'll need to plan for considerations like securing more funding, adding employees, expanding locations, building a bigger customer base and developing new products and services.