What is an Enterprise?
An enterprise is a business undertaking, carried out by an individual or group of individuals for the purpose of making profit. A business enterprise can take several forms, including sole proprietorship, partnership, limited liability company, cooperative society, and public corporation. Examples include Charter Voyage (transport), Express Union (money transfer), and MTN (telecommunication).
Elements That Constitute an Enterprise
- Land (natural resources): gifts provided by nature — rocks, trees, seas, mineral deposits — whose reward is rent. Land has no production cost, is fixed and limited in supply, is geographically immobile but occupationally mobile, and is subject to the law of diminishing returns.
- Labour (human capital): any human effort directed toward producing goods and services, whose reward is wage. Its productivity is the total output a worker produces in a given time, and its supply is the total hours (or people) available for production.
- Capital: to an economist, man-made resources needed to produce other goods — wealth set aside to produce more wealth. To a businessman, capital is the funds needed to acquire the business’s assets.
- Entrepreneur: the person who manages and organises the other factors, coordinating them and earning profit as their reward.
