An enterprise is defined as a human enterprise or organized body performing commercial, industrial, or other productive activities. In business terms, a business is defined when people engage in business activities that are productive and create economic value for both the owners and the recipients of those activities who are involved in the production, acquisition, distribution, saving, and marketing of tangible assets or non-utility economic goods.
In business terms, also referred to as an enterprise, there are many kinds of enterprises. A business can be a partnership involving two or more persons or it can also be a single business unit owned by a corporation or limited liability company with various employees. The most important aspect of any enterprise is its profitability; therefore, entrepreneurs must take into account a variety of factors before deciding on the specific kind of enterprise they would like to start.
Entrepreneurs must first determine the scope of their venture. This involves estimating the total worth of the goods or services to be produced or traded and including the costs such as labor, raw materials, and overhead to arrive at a firm’s estimated profit. To arrive at a firm’s profit, all the factors affecting the production must be considered such as cost of capital, rate of profit, the demand and supply of the products, and the competition.
If the research reveals that there is a product or service whose demand or supply is likely to increase in the market in the near future, then entrepreneurs should invest in the said product or service. On the other hand, if there is a lack of demand or supply, then no investment should be made since there is no chance of gaining a profit from it. In order to come up with a firm’s profit, all the factors affecting production should be carefully analyzed and a firm’s specific needs should be determined.
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Another important aspect of business is its stakeholders or customers. These are the groups that make a firm profitable such as consumers, employees, and banks. All these groups share equal rights in the profits of a business. However, the amount of profits is not the only consideration for stakeholders. There are also other things that they should be concerned about such as the quality of services rendered by the business, satisfaction of their customers, and the environmental impact caused by the business.