What is Enterprise? The Definition and Evolution of Enterprise

Enterprise, or Enterprise Management, is a term to be considered in a light-hearted way as in “Enterprise Renting,” where a tenant rents space in a building, not unlike a lodger. But Enterprise is much more than renting space; it is about being an active participant in building a strong future for oneself and one’s business. Enterprise started off as an association founded by Benjamin Franklin that later evolved into a concept of economic management. The term itself got its start with James Freeman Clarke’s well-known essay “A History of the Rise and Fall of Enterprise.” The essay noted that it took a long time for an enterprise to rise again after it had fallen for several years during the Colonial days.

Enterprising spirits and the need to experiment drove a group of people to form the first Enterprise Club in 1769. The club later became known as the First American Enterprise, and its aim was to promote entrepreneurial activity, especially among the younger population. A century and a half later, the term enterprise has a different meaning altogether as it relates to ventures in partnership with other like-minded individuals or groups. Today, enterprises may include business ventures, charitable endeavors, art creations or any combination thereof.

Among the most popular of ventures under this term are those which take the form of sole proprietorship. A sole proprietor is a sole partner in a business and is responsible for all the financial obligations of the business, including the payment of the rent and employee payroll. A sole proprietor is not responsible for buying or selling assets, doing advertising or marketing the business, or doing anything else that would normally belong to the hands of a corporation. However, a sole proprietor has the right to hire his or her own attorney and accountant and must submit the business plan for approval by a board of directors. For these reasons, sole proprietors are often easier to start and operate businesses than corporations, though they do not enjoy the privileges of having stockholders in an enterprise.