Importance of the Factors of Production The factors of production are very important to the growth of companies . There are four factors of production , which are labor , land , capital , and entrepreneurship . They all are in a chain of events , each one leans on another besides land . Land is the main thing that provides support to the whole concept . The land is the first concept of the four , the land refers to natural resources that are used in the process of creating the product . Then , labor comes next, which is what's needed to create the product or to put it together . Capital is next , capital is referring to man -made machinery and equipment used to make the product , and chemicals too . Capital is just for capital goods which are non -private things like public transportation , public facilities , work buildings , and commercial objects . Finally , entrepreneurship is next Entrepreneurs take the three other factors and develop the idea into actual business . The total income they earn is the profits . Also , some people may think there are a total of five factors of production but there is not . Some may consider capital finance a fifth factor but it is not because the money assists the process of