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Chapter – 1
Enterprise
15.
TRIPLE BOTTOM LINE
The three objectives of social enterprises:
Economic- make profit , reinvest, provide some return to owners
Social- Provide jobs
Environmental- manage business in an environmentally sustainable way
NOTES FROM THE BOOK Peter S and AF
Business activity doesn’t take place in isolation from the surroundings.
 PURPOSE OF BUSINESS ACTIVITY:
Identify needs, uses resources, convert resources into finished usable form, adding
value to goods and services produced, with the aim of making profits
 ADDED VALUE
Difference between cost of purchasing raw materials and the price the finished
goods are sold for.
Eg. Jewellers can add value by well designed window display, beautiful boxes

ENTREPRENEUR
ROLE: Idea of new business. Invest, accept responsibility and risks, manage
the list
CHARACTERS OF SUCCESSFUL ENTREPRENEUR:
Innovation- able to carve new niche
Commitment and self motivation
Multiskilled- make product, promote it sell it, use profits wisely
Leadershipshp skills- encourage people in the business
Self confidence and ability to bounce back from any setbacks
Risk taking- to invest savings in the new business
MAJOR CHALLENGES FACED BY ENTREPRENEURS
1. Identifying successful opportunities- New business idea comes from
 Own skills and hobbies
 Previous employment experiences
 Franchising conferences and exhibitions
 Small budget market research
2- Sourcing Capital- problems can be due to
 Lack of sufficient own finance
 Lack of support and grants
 Lack of trading recrds to present to banks
 Poor business plan to convince potential investors
3. Determining a location- so as to have min. fixed cost. Problems can be
 Not close to potential market
4. Competition- always a problem unless has something unique
eg better customer service.
5. Building customer base- to encourage customers to buy again and again
How to do that ?
 Better pre and after sales service
WHY BUSINESSES FAIL??
Success of new business can never be guaranteed due to following:
 1 Lack of record keeping- as cann’t remember everything, moreover if
computers fail then manual records work so should have manual recrds too
 2 Lack or working capital- for day to day cash, holding stocks or giving
credits to customers
So, how to avoid capital deficiencies
 Cash flow forecasting
 Good relations with bank to solve short term problems
 Effective credit control over customers
3. Changes in business environment – New competitors, legal
changes,economic changes, technological changes
4. Poor management skills Due to absence of leadership, cash handling,
planning coordinating skills, decision making communicaton , marketing
promotion and selling skills
So, Enterpreneurs should be encouraged to attend training to gain these skills
before investing hard earned capital at risk.
COMMON TYPES OF ENTREPRENEURIAL BUSINESSES
Primary, secondary, tertiary
IMPACT OF ENTERPRISE ON COUNTRY’S ECONOMY
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Employment creation- to rise economy, employment should be offered
to community other than relatives
Economic growth- Increase in output
increase in GDP
Increase in living standards
increase in tax revenues.
Innovation and technology change increase use of IT and hence making
nation’s business sector more competitive
Exports- improve international competitiveness
Personal Development- Example for others to follow and boost the
economy
Increased social cohesion- by creating jobs
We live in world of great wealth and great scarcity. Shortage of products and the
resources needed to make them has lead to make choices to get greatest benefits
leaving out things of lesser value
TRIPLE BOTTOM LINE
The three objectives of social enterprises:
Economic- make profit , reinvest, provide some return to owners
Social- Provide jobs
Environmental- manage business in an environmentally sustainable way
Social enterprises use principles and ethics to achieve objectives which is generally not
only profit