Business Management – HigherBusiness Enterprise

Business in Contemporary SocietyRole of Enterprise & the Entrepreneur

Combining Factors of Production

The role of the entrepreneur is to combine human, natural and man-made resources in order to produce goods or services.

Identifying Business Opportunities

Without enterprise the provision of goods and services will not happen.

The entrepreneur sets things in motion by:› having and then developing a business idea› ensuring that all the resources necessary are

available to put the idea into practice› using his/her own, or borrowed money to

finance the cost of acquiring the resources. › being willing to take the risk of losing what

has been invested.

Innovation & Risk Taking

The entrepreneur will identify an opportunity to provide new goods or services, or to provide existing goods or services cheaper or in a better way.

This could involve identifying a new market for existing products, such as sports clothing for casual wear, as was the case with John Boyle and Sports Division.

Stagecoach, started out by offering very cheap bus journeys from Glasgow to London which proved very popular and profitable.

James Dyson successfully developed an effective solution to the loss of suction in bagged vacuum cleaners and now produces the most popular cleaners in western Europe, Australia and New Zealand.

Franchising

Starting a new business involves a high level of risk. In order to minimise the chances of failure, many

budding entrepreneurs use franchising as a means of starting up their own business.

There is a greater chance of success as support and guidance is provided to the franchisee by the franchiser.

For eg Richard Branson, who, despite amassing great wealth through successful business ventures over recent decades, was eager to obtain a franchise to run Virgin Trains on the former British Rail network. It entails the risk of losing £millions should Virgin fail to meet the targets agreed when they took on the franchise.