What is business enterprise? According to Wikipedia, business is “an organizational entity involved in the provision of goods and services to consumers.” This seems to be the most common definition however, business is much more complex than that. For example, there are multiple ways of owning a business as well as multiple things a business can provide to its customers. For example, a financial business would be like a bank which loans money to its customers and also gives their customers a place where they can store their money. Howard R. Bowen, an economist, even writes in his article “Turnover of Business Enterprises” about how the state of the government can affect the number of business in the country. Enterprise on the other hand, is described as, “a project or activity that involves many people and that is often difficult”. Other sites and definitions for enterprise include “a company organized for commercial purposes; business firm”. Combined, business and enterprise mean, an organization that provides good and services to others while being run by many people.
To start with the basics of business, there are four main ways a business can be owned. These four ways are, sole proprietorship, partnership, corporation, and cooperative. Sole proprietorship is when one person owns the business by themselves. This person owns every asset of the business including the equipment and the real estate the business is built on. Partnership is where two or more people own the business and share its assets and each partner is responsible for any debts acquired by the business. Corporation is where a group of shareholders, the board of directors, make the decisions about the business. Cooperative, or co-op, is similar to corporation except that instead of the decision makers being shareholders they are members. There is another classification of business called Minority Business Enterprise (MBE). MBE is where at least 51% of the business is owned by minority group such as women.
In “Turnover of Business Enterprises”, Bowen demonstrates how the number of business in the country can change. He mentions the highest number of businesses in America was probably right before the bombing of Pearl Harbor. During World War II, the number of businesses dropped dramatically as more and more financial backing from the government was going toward the military instead of businesses. War however, is not the only thing that affects the number of businesses. New technologies also have an alarming effect on business. Technology allows for businesses to expand and for more businesses to grow out of it. With all the new technologies, the number of businesses has been on a steady rise in the United States.
Thorstein Velben wrote “The Theory of Business Enterprise” in 1904 to demonstrate the relationship between business and industry. In his book he defines business as “making profits” and industry as “making products.” He also mentions the fine line connecting the two. While both need each other there are also risks involved. Over-production would lead to a fall in profits as would a lack of production. There needed to be a perfect balance between the two in order for profits to be made. However, there also needs to be a lot of production to fulfill the American need for standardization.
In short, a business is a place that works to create a profit. This profit can either benefit a multitude of people, the government, or a single person. Each business provides a good or service to the customer and these types of services can range from a long list of things. Businesses have become a major part of the worlds’ economy and have been known to change over time.