Enterprise turns creative ideas and opportunities into targeted actions that create value. In the exam, you need to identify financial, cultural and social enterprises and explain the distinct role each plays in society.
What enterprise means — and the three types
Enterprise is the ability of a person, acting independently or with others, to creatively generate and build ideas, to identify opportunities for innovation and turn them into practical and targeted actions.
Entrepreneurship means acting upon opportunities and ideas to transform them into value for others (financial, cultural or social).
| Value Created | Type of Enterprise | Primary Goal |
|---|---|---|
| Financial | Financial enterprise | Earn commercial profit |
| Social | Social enterprise | Tackle social or environmental issues |
| Cultural | Cultural enterprise | Promote arts, heritage and sport |
To identify an enterprise type, ask one diagnostic question: what is its main purpose?
Financial Enterprise
A financial enterprise is a commercial business set up to make a profit by selling goods or services. Profit is the amount left when total costs are deducted from total revenue.
Primary motive: To earn commercial profit for owners and shareholders.
Surplus/Profits: Profits are kept by owners or distributed to shareholders as dividends.
Irish examples: Penneys, SuperValu and local sole traders such as a hairdresser or plumber.
Role in society:
- Creates jobs and buys from local suppliers, which provides wages and helps the local economy grow.
- Supplies essential goods and services to satisfy consumer needs.
- Pays tax on its profits — corporation tax for a company, income tax for a sole trader — which helps fund public services.
Cultural Enterprise
A cultural enterprise is an organisation established to promote, preserve and share aspects of arts, heritage, sports and language.
Primary motive: Cultural enrichment, community identity and artistic expression.
Funding/Surplus: Many are not-for-profit, like the GAA or a local arts centre; others charge admission or ticket prices to cover costs.
Irish examples: The Gaelic Athletic Association or GAA (keeps hurling and Gaelic football alive in every parish), Galway International Arts Festival and local community theatres.
Role in society:
- Preserves traditions, history and the Irish language for future generations.
- Encourages physical activity, creativity and community spirit through sports and the arts.
- Boosts the local economy by attracting tourists who spend money in local shops, restaurants and hotels.
Key terms
- Enterprise
- The ability of a person, acting independently or with others, to creatively generate and build ideas, to identify opportunities for innovation and turn them into practical and targeted actions.
- Entrepreneurship
- To act upon opportunities and ideas and transform them into value for others (financial, cultural or social).
- Financial Enterprise
- A commercial business set up with the primary aim of making a profit by selling goods or services.
- Social Enterprise
- A business that earns income by trading to tackle social or environmental issues, reinvesting its surplus back into its mission.
- Cultural Enterprise
- An organisation established to promote, preserve and share aspects of culture, heritage, arts or sports.
- Profit
- The amount by which total revenue exceeds total costs.
- Surplus
- The excess income earned by a non-profit or social enterprise that is reinvested into its cause rather than taken by owners.
Check yourself
What is the primary objective of a financial enterprise?
To generate a profit for its owners or shareholders by providing goods or services.
A café sells coffee and uses all its surplus to train young people who left school early. What type of enterprise is it?
A social enterprise, because its main purpose is social and all surplus money goes back into the cause.
What does a social enterprise do with any surplus it earns?
It reinvests the surplus directly back into achieving its social or environmental mission.
Name one way financial enterprises help fund government services.
They pay tax on their profits, such as corporation tax or income tax, which funds schools, roads and hospitals.
Social Enterprise
A social enterprise sells goods or services to tackle a social or environmental problem, not to make profit for private owners. It earns most of its income by trading, whereas a charity depends mainly on donations and fundraising.
Primary motive: To carry out a social, community or environmental mission while earning enough money to keep going.
Surplus/Profits: Any surplus is reinvested directly into its social mission rather than paid out to private owners.
Irish example: FoodCloud, which matches supermarkets that have surplus food with local community charities.
Role in society: