Q1: What is the important consideration for the commencement of new business?
What are the important points a business will consider first before the starting of new business?
Commencement Of A New Business
There was a time when any body thought of setting up a shop to earn could launch upon the said enterprise with fair expectations of success. But those comfortable days have sunk into the yawning gulf of the time. In modern times of over crowded business, business has become a very risky game and those who are engage in it have to take utmost precautions and care at every step. This is more so at the time of Commencement of a new business.
FUNDAMENTAL CONSIDERATION IN STARTING A BUSINESS;
Before starting a business a plan and a systematic study should be made of various preliminary considerations upon which depends the success or failure of business. The various considerations which must be carefully thought over before starting a business are discussed below.
1. KIND OF BUSINESS:
The first thing which man is extending to enter into a business has to consider is the kind of the business he should take up. There are so many classes and sub classes of business. And to pick up the best and most profitable line out them requires considerable knowledge, experience and for sight. The criteria determining the suitability or otherwise of a business are several. The are profit yielding capacity, the degree of risk involved. The extend of skill and knowledge and finally the personnel taste of a person.
2. FORMS OF BUSINESS ORGANIZATION:
Once the actual business to be launched upon is decided the next logical question coming up for consideration is the form of business establishment is to take. In other words it has to be settled whether is to be one man’s business or partnership or joint stick company. Hence a business should be given a form which is most suited to it from all angle of vision.
3. ESTIMATION OF PROFITABILITY OF BUSINESS:
Next stage is to estimate the profitability of the business which the product and service which are going to be sold will give.
4. SIZE OF BUSINESS:
There are three types of business, via, manufacturing, non-manufacturing and services. All the three kinds may be large, medium or small. The size of business depends upon the recourses which a business man is going to invest. So the business man will consider what size of business he should start and how much he should invest so that he can earn profit according to his requirements.
Financial consideration is very important before staring a business. Unless sufficient funds are not arranges it would not be possible to operate the business. The funds or capital can be arranged by the owner himself or credit.
6. KNOWLEDGE OF THE MARKET:
The knowledge of the market available for the particular product is necessary part for the business man to know. Before staring a business he should have information regarding the target customers, income patterns, buying habits and tastes, numbers of competitors etc.
Another worth considering factor is the location. If it is manufacturing business one must consider the availability of raw material, skilled labor, transportation etc. and if it is a retail business then factors like nearest to market, sale promotional devices come under consideration.
8. ORGANIZATION AND MANAGEMENT:
The managerial and organizing capacities must be considered very carefully. Large business has huge complicated managerial problems. So skilled and qualified employer must be hired.
9. GOVERNMENT POLICIES:
The government has formulated some rules and regulations for the particular type of business, to regulate the activities of the business. So the government policies should be considered. After establishment, income, tax, sales tax etc. must also be considered.
10. STAFF OF THE OFFICE:
The business may require the service of some clerk; salesman etc. special care should be bestowed on engaging the staff. Efficiency should never be scarified for cheapness. The sound course is to make correct salaries in proper proportion.
11. OFFICE EQUIPMENT:
Every business has to maintain an office. In these days of rapid development, stationery type writers, duplicating machines etc. must be provided, so that the business process are more quick and efficiently carried out.
12. BUSINESS ETHICS OR MORAL:
Morally in business as anywhere else has distinct role to play in the shaping of successful business career. Business ethics is more important because it shapes sound. Economic policy, honest cost accounting sounds credit arrangement.