What does enterprise mean in business?

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An entrepreneur needs to be able to turn an idea into a successful business. Enterprise is a skill. Put simply, enterprise is the willingness of an individual or organization to: Take risk, Show initiative and 'make things happen' and Undertake new ventures. An enterprise is an activity or a project that produces services or products. There are two types of enterprise.
  • Business enterprises are run to make a profit. 
  • Social enterprises provide services to individuals and groups in the community.

Business enterprises

An entrepreneur needs to be able to turn an idea into a successful business. Enterprise is a skill.
Many enterprises in your community are small businesses. Sometimes one person owns and runs the business. Sometimes it's a family business. Other businesses are owned and run by partners who aren't related.

To earn an income from a small business, the enterprise has to run at a profit. That means some money should be left over for the business owner once all the costs of making the product or delivering the service have been taken out.

Common small businesses include:

  • businesses with a workplace or shopfront: for example, restaurants, corner shops, hairdressing salons, smash repairers and small factories 
  • trade-related services that deal directly with the customer: for example, plumbers, electricians, builders, cleaners and computer technicians
  • self-employed people working from home: for example, engineers, designers, caterers, writers, musicians and dressmakers
  • medical and health practitioners: for example, doctors, dentists, optometrists, counselors and naturopaths.
Small businesses are distinct from start-ups, which are early-stage technology companies founded by entrepreneurs prepared to take bold risks to grow a unique business. Whereas a small business that experiences growth remains a small business, start-ups have the ability to quickly become large businesses with significant market share in their industry.


An individual franchise operation is a small business that is linked to a larger enterprise. Almost any product or service is available through some type of franchise operation, such as petrol, food, clothing and even mortgage consultancy.

Franchising is a way for successful enterprises to extend their reach, and for individual investors to take part in their success. There are three parts to a franchise:

  • the franchise: the business idea, process, product, brand name etc. 
  • the franchisor: the person or organization that owns the business idea, process, product or name 
  • the franchisee: the person who buys the right to use the business idea, process, product or name.

Social enterprises

Social enterprises are organizations led by local communities. They are small businesses but have been set up for a social purpose. Social enterprises need to be successful but their success is measured in terms of social rather than monetary benefits. Some examples of social enterprises are:
  • community-based child care centers
  • health care centers
  • sports clubs 
  • Meals on Wheels 
  • housing cooperatives 
  • charities
These enterprises must find a way to cover their expenses. Often they fund themselves using a combination of government funding, fundraising and fees charged to users of the service.

You can talk to the community development officer at your local council for information about social enterprises in your area.

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