Different terms are used to describe ventures in the world of business. While some refer to a specific business venture, some are interchangeable synonyms. One such term is enterprise. What is an enterprise? What distinguishes an enterprise from other business terms? Is it another name for a business? You may be asking yourself myriad such questions with no conclusive answers. In this informative guide, we will look to answer exactly that. We will also look at the different forms of enterprise business that exist. But before that, let us start by answering the most straightforward question: what is an enterprise business?
An Enterprise Business
To begin with, an enterprise is an organization that aims to make money, profits, or some form of return. Frequently, the word enterprise is associated with entrepreneurial ventures but is a general term referring to any for-profit business or venture. There, an enterprise refers to a for-profit business started and run by an entrepreneur, and the running of such a business is often referred to as enterprising.
It can also refer to two specific types of business that include the following:
The specific meaning of the word enterprise depends on the context. Generally, an enterprise business is usually a small business, mainly a sole proprietorship with a for-profit status run by an entrepreneur. It is new, ambitious, and scaling when referring to a company or any business venture as an enterprise business.
The main focus of an enterprise business is learning. In terms of marketing, enterprise businesses may be A/B testing blog post designs, various social media platforms, and digital newsletter formats. Enterprise businesses adopt a full-on-growth mode. As partnerships form or funding materializes, staffing levels may exponentially boom and may experience growth in other business operations.
Regardless of the definition used, enterprise businesses are generally established for the following reasons:
Idea exploitation- This involves converting an idea into goods and services for the benefit of the customers and society, in general.
Market gap filling-Involves identifying what the market lacks and filling them up.
Competitive pricing by offering a product or service at a reduced cost
Knowledge-based by supplying a new set of skills and knowledge
Types of Enterprises
Business is business, right? This is far from the truth. In marketing, businesses are categorized based on many factors, including audiences, service, and size. Depending on how businesses are structured and legally owned, there are various types of enterprise businesses that exist
The law recognizes the following types of legal enterprises
This is a small business usually run by a single trader and mainly represents the foundation of a market economy. They are generally established for the owner’s financial benefit with unlimited liability for any damages occurring due to business operations.
In this form of business, two or more individuals share profits, decision-making, and entity ownership, but the share may not be necessarily equal. There may be a hierarchy in some business structures where there are seniors and juniors, while all the partners may be equal in some.
It is an distinct legal entity created to protect the entity’s owners if and when it is subject to a lawsuit. There are various forms of corporations depending on several factors.
Limited Liability Company
These are legal enterprises where the owners are not personally liable for the damages of the business. A limited liability company is a specific business structure of private limited companies which offers legal protection to a corporation and tax treatment of a partnership.
Professional Limited Liability Company/ Professional CompanyThese legal companies are for licensed professional firms, including doctors, engineers, lawyers, and accountants. These licensed professional firms offer protection to owners should a liability arise, like in the case of a corporation.
Formation of an Enterprise
The process of forming an enterprise, from identifying an opportunity to launching a business, is common to all forms of enterprise.
It is generally a five-step process as follows:
Business Opportunity Identification
At this point, the entrepreneur is an opportunity seeker, as he looks for opportunity in the middle of every difficulty. Identifying options is not easy, and the entrepreneur needs to be alert to be able to grab them as they come. This step involves scanning the environment, identifying customer needs and wants, and understanding competitors.
Business Idea Generation
The entrepreneur will then generate a business idea from the perceived opportunity. This is the most outstanding function of the entrepreneur as it provides benefits to the society, goods and services to the customers, and profits for the entrepreneur. It is a critical role that requires skills, education, and training.
At this stage, the entrepreneur tries to assess the viability of the proposed idea to tell whether it is profitable or not.
Preparing a Business Plan
This next step involves designing and preparing the organizational structure for implementing the plan. The plan serves as a blueprint of how the entrepreneur intends to operate the business, including the company culture. It also helps to maintain business focus, understand competitors and customers, secure outside financing, and assess the feasibility of the entrepreneurial venture.
Launching the Enterprise
This is the last step and involves fulfilling the legal formalities and requirements. It consists in acquiring licenses and permissions from local authorities and registration. The entrepreneur will have to submit relevant legal documents for all these statutory requirements. For registration, their registrar will request some distinct legal documents to be registered. Once everything is completed, you will be given some legal documents like a certificate of registration or incorporation that will allow you to launch and commence your enterprise business process.
Enterprise Risk Management (ERM)
All enterprises are faced with risk and, therefore, the need for enterprise risk management. Risk management is essential for all entrepreneurial ventures and should be embedded in the daily enterprise business process. Enterprise risk management refers to techniques and methods of managing risks and seizing opportunities.
It is a company-wide collaboration strategy to identify and prepare for risks and hazards. It involves methodologically identifying and addressing potential events that increase the risk of an unwanted event occurring to enable the company to gain a competitive advantage.
Benefits of ERM
Ensures awareness of the risks facing the entity
Increase the effectiveness and efficiency of operations
Promotes confidence about achieving organizational goals and objectives
Ensures compliance with statutory, reporting, and regulatory requirements
There are four main types of risks that an entity faces. They are hazards, financial, strategic, and operational risks. The ERM ensures the organization identifies and mitigates such risks on time to avoid problems that may result from failure to address them.
An enterprise business is a small business, mainly a start-up devoted to learning and growing its operations, company culture, and processes. Growing a business is not an easy job. It is complicated, full of challenges, and requires time. The only way to grow your small business is by having more customers, which will translate to more sales and consequently increased profits: this is easier said than done.
For this reason, you may need to employ our services at Connected to grow your business. We are dedicated and have devoted ourselves to helping enterprises grow through simple and automated lead generation. We are a reliable lead generation company that helps enterprises connect with their target customers for more sales and guaranteed growth. Contact us today at Kennected to experience exponential growth in your business.