Steps In Establishing A Business

1. Conceptualization

When establishing a business you begin with the conceptualization of an idea or proposal. During this early step the product or service idea is visualized.  You as an Entrepreneur should recognize a need in the market for example a service that no one is providing yet or a product that no one has come up with. In the event the product or service already exists then thoughts to make adjustments may be conceptualized. Hence the individual who wants to set up the business must come up with ideas concerning the product, type of business, size of business, etc.

2. Research

As an entrepreneur you should be a smart business person and take calculated risks. Before putting money in a business undertaking a market research should be done to determine the degree of need for the good or service. This facilitates to reduce losses for the entrepreneur who wants to make a profit at all times. This market research entails collecting information about a prospective market to assist a business person to make choices about coming into that market. So, Market research is an organized approach to collecting information, recording and analysing the information gathered and allowing it to fit the marketing plan of the business.

3. Identification of resources

If the market research is positive the entrepreneur should now recognize the required resources to manage the business.  The resources necessary apart from entrepreneurship are land, labour and capital. In looking at land it involves locality or place used to set up a business. This can be purchased, rented or a family place. In looking at labour they should be competent, qualified, trained and skilled to competently perform their tasks. In looking at capital it involves finances, raw material and assets such as machines, tools and equipment. Hence, resources refer to the factors that will be employed in making the good or service. A judgment must be taken as to the kind of resources and where they will originate.

4. Creation of a business plan

Doing a business plan is very significant before the launch of a business. This will assist the business to determine whether or not the business undertaking will be profitable. A business plan summarizes the aims of a business and the policies that will be in use to attain them. In the event that the entrepreneur wants a loan, generally financial organizations want a business plan to be presented. A business plan is a written summary of an entrepreneur’s projected business undertaking. It includes its operational, financial, marketing and management plans etc.

5. Acquisition of funds

One should try to acquire funds when starting a business. There are numerous financial establishments that are ready to support small businesses once their business proposals are considered feasible. The entrepreneur must consider the pros and cons of attaining funds from the different monetary institutions.  Funds may be obtained from friends and relatives at a low or no repayment cost. Funds can also be obtained from individual savings. One can prevent high costs of capital by promoting partnerships or selling shares. Getting funds will definitely help the entrepreneur start the business.

6. Operation of a business

An entrepreneur should competently operate a business to guarantee high value goods and services. It is vital to continue loyal customers and for business development. The entrepreneur can hire an operation manager to plan and supervise the business’ operations. This individual helps in the improvement and supervision of the different procedures used to produce goods and services competently to guarantee customer approval. In establishing your business, you must make certain that you have the essential functional areas of the business. These include specialized departments within a business. These departments handle particular functions that support the business overall. For a small business there are no definite functional areas present because the entrepreneur does almost everything like marketing, producing, accounting, hiring etc.. However in large businesses you should four functional areas: production, finance, marketing and personnel. In very large businesses, there are additional functional areas like research and development.