Business Enterprises

Business Enterprise Business enterprise is the ability to identify opportunities and take advantage of them. New Business Ideas Businesses that become and remain successful are those that can adapt quickly to changing customer wants and needs. Being able to identify changing tastes and new trends helps businesses generate new ideas. Business ideas may be completely original or an update to an existing product or idea. New business ideas are inspired by changes in technology, changing customer demands and products becoming obsolete. Quite often, these factors are interlinked. Business Example NETFLIX In 2007, the entertainment company Netflix broke with movie rental industry norms by offering online streaming of video on demand. It took advantage of changing technology to meet changing customer wants. Changes in Technology Improved access to the Internet and mobile devices enabled Netflix to offer online streaming of video. Changes in Demand With people's lifestyles becoming busier, there is more demand for instant access to goods and services. Products Becoming Obsolete The need for physical DVD rental services is now becoming obsolete. The Purpose of Business Activity All business activity has a purpose. This is generally to produce goods or services to meet customer demands. Customers must want or need to buy the goods or services a business offers. Businesses can also choose to add value to an existing product through improving: Originality Offers a unique selling point (USP) that sets a product apart from competing items. Example: Dyson introducing bagless vacuum cleaners. Convenience Helps makes customers' lives easier. Example: Supermarkets enabling customers to shop online and have their items delivered. Brand Image Builds trust and makes the product more recognisable and desirable. Example: The brand Coca-Cola being synonymous with the cola soft drink. Design Can enhance the aesthetics, functionality and quality of a product. Example: Food companies replacing glass bottles with squeezable plastic bottles to improve functionality. Entrepreneurship An entrepreneur needs to have certain characteristics to be successful. Entrepreneurs must have good organisational skills to ensure that tasks are carried out accurately and on time. This will also involve thinking ahead to plan effectively for the future. Entrepreneurs must also be bold enough to take calculated risks. When opportunities and difficulties arise, a quick-thinking and confident decision-maker is vital. CHARACTERISTICS INNOVATIVE ORGANISER RISK TAKER DETERMINED LEADER DECISION-MAKER Risk & Reward Risk Reward Business Failure Over 50% of new businesses fail within the first five years. As such, the risk involved in setting up a new business, as well as for releasing a new product, is high. ?? Financial Loss Shareholders of limited companies are personally protected from business losses. However, most new businesses are sole traders or partnerships, which means their owners are personally liable for any losses. Lack of Security Entrepreneurs must commit a great deal of time and effort - and possibly give up a steady salary - to start their business. Business Success One of the biggest rewards for any entrepreneur is the excitement of seeing their idea become a success. Profit A successful business creates the possibility of making a great profit. Should the business meet or exceed customer expectations, the financial reward can be significant. Independence Entrepreneurs have the freedom to make their own decisions about their business and the actions they should take.