Business organisation

An entrepreneur is defined as someone who has the ability to take risks and organise the factors of production. When starting a new business the entrepreneur faces a number of problems before they can start up. They need an idea and a will to succeed, but these are not enough on their own to be successful.

A business needs:

• Finance – to fund the other elements listed below: finance is usually the hardest thing to obtain in a start-up business.
• Labour – to help develop a product or service and then to produce/deliver it.
• Customers – without them, the business will fail. Obtaining customers means the business must undertake marketing.
• Suppliers – provide many of the “inputs”, such as raw materials.
• Premises and equipment – maybe a simple office, or possibly a large, modern factory; depending on what the business activity is.
• Management organisation & structure – this is often very simple at the start-up stage (e.g. a sole trader!).
• Designed, researched and tested product or service – a successful business is about more than just having a good idea – the product needs to be brought to the marketplace in its best format. Dyson spent many years completing his first vacuum cleaner before being able to sell it.

A business may also need to protect its idea or products.

It can do this through:

• Copyright and patents make it illegal for other firms to copy directly the business idea or invention.
• Keep new products and services secret until they are ready for launch.
• Focus on retaining key staff that would be otherwise valuable for competitors to poach!

Entrepreneurs

An entrepreneur needs several skills to succeed:

• Have ideas
• Ability to take risks
• Ability to persuade others to join the business or lend the business money
• Energy to keep the business going under tough circumstances – it is often said that the best entrepreneurs are the most persistent

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