There are several issues that one need to consider in starting a new business. These issues relate to marketing research, competitive analysis, and financial matters. Below, we define some of these issues on detail.
To finish my projects I contacted over ten professors at our university and other institutions, and have obtained valuable advice from them. I was fortunate enough to receive the valuable advise from two of my family friends, who I interviewed about the issues of opening a new business. One of the family friends that I interviewed is Mr. Arshadi, who is self-employed and the other family friend, Mr. Ghomeshi, is a manager at a company. I also looked at several Internet resources to find the useful information about opening a new business.
Based on the research, I was able to find the following issues that are important in opening a new business.
As we know that in order for a business to succeed, one is required to find the right business opportunity. If a person does not have a clear idea of what business he or shed wants to go into and where he/she wants to operate it, it would become for difficult for the person to succeed in a new business. Therefore, one is required to do some intelligent investigation of all possible opportunities that might be suitable in opening a new business. Certainly, with the advent of the Internet and relaxed economic climate, more opportunities exist today than ever before (Boyd, Gupta, and Sussman, 339) However, one can not venture into a new business, unless he/she clearly chalks out the pros and cons of an opening a new business in a particular area.
There are some basic things a person can do while opening a new business. He should be able to respond to the following questions: First, the person should be able to answer whether or not his idea is practical and whether it would fill a need for the customers. The second, the person should be able to clearly define his/her competition. Third, the person should be able to tell the business advantage over existing firms. If one finds difficult to tell what advantages his or her business will have over other competitors, it simply tells that the person has not carefully looked at all of the aspects of the opening a new business. Also, the person should be able to respond whether or not he/she can deliver a better quality service to the customers. Finally, the person should be able to know what opportunities are available in the area, where one wants to operate the business (Trepper, 60).
If a person finds that there is ample opportunity in the marketplace in opening a new business, he/she is required to do a great deal of investigating of the market to make sure that the opportunity for opening a new business will remain viable in the future and he/she would be able to fulfill the needs of the customers (Racanelli, 19). During this phase, one of the most important questions a person should ask is whether he/she knows and understands the market for the particular kind of products or services that he/she intends to sell. If one is thinking of buying an existing business or franchise, he/she should always investigate all aspects of the franchise, before one makes the decision to invest in the franchise. In other words, one is required to check the company and do a market feasibility study before committing to the new business. At this point, a person is required to consider a couple of points: First, the person should estimate how much competition he/she will face from the existing companies. Second, which kinds of companies are likely to be to competitors of the new firm. Third, the person should be able to clearly articulate which kinds of customers the business wants to attract and sell the products/services. Finally, before opening a new business, one should look at the social, economic or technological trends that will create new markets.
The next issue in opening a new business deals with the business plan. At this time, one should write a clear business plan that answers the following questions: What business am I interested in starting? What services or products will I sell? Where will I be located? What skills and experience do I bring to the business? What will I name my business? What equipment or supplies will I need? What insurance coverage will be needed? What financing will I need? What are my resources? How will I compensate myself?
The importance of a sound business plan cannot be over-emphasized. If one does not spend enough time thinking about a business plan, it is very difficult for one to be successful in a new business. The business plan is considered as an operating tool that helps one to manage a business and work toward its success. The process of creating a solid business plan forces one to take a realistic look at a new business that one wants to opne. The key components to a good business plan should be:
statement of purpose & summary: The person should be clear enough about the purpose of opening a new business.
Business description: The person should have a clear idea in which areas of the business he/she wants to operate and compete.
Market analysis & research: The person should clearly illustrate the existing market trends and existing competition from the existing businesses in the marketplace.
Marketing strategy: The person should clearly articulate how he/she is going to attract new customers and sell the things to them.
Design & Development plans: The person should show how he/she is going to develop and grow the business.
Operational plans: The person should articulate what is the urgent requirements in skills, material, people, cash, machines, and other things that are essential for the operations of the business.
Financial data: Here, the person should clearly estimate what are the projected cash that will required to open a new business and how he/she is going to get the required financial resources.
Sales projections: Here, the person should clearly articulate how much sales he/she expects from the new business over 3-month, 6-month, 1-year, and over 1 year. This projection provides an idea how the financial cash would be recovered overtime.
Production goals & strategies: Here the person should show what is the main mission of the company and how he/she wishes to accomplish it.
Besides, the above points, there are several other supporting information will be required to show that one has given ample thought over opening a new business.
Business plan itself does not bring the success. Rather, it works as a roadmap to success because it will guide one in the design, operation, and growth of a business.
The next aspect of opening a small business involved finding the required financing, as shown in the business plan, because often people are unable to find the required money for opening a new business. For most new businesses, the primary source of capital is usually comes from savings and forms of personal resources. However, one can look at several resources when considering for financing. It is important to explore all of the options before making a decision. Some areas to explore are as follows: Personal savings; helps from friends and relatives; and loans from banks and credit unions.
If one needs to borrow the money to start a business, many banks and credit unions have small business loans available. Therefore, one should check with the local financial institutions. Some time other sources such as U.S. Small Business Administration can also provide financial help in opening a new business (see (www.irs.ustreas.gov/businesses/small/article/0%2C%2Cid=99336%2C00.html,).
Next issue of opening a new business involves setting up the business legally. It requires on choosing a name for the business - The name one chooses for a business can be important from a business image standpoint as well as in communicating to the public what one have to offer. Most small business are advised to select a name that clearly describes the product or service provided. Once one have named a business, he/she will then need to structure a business legally. One has several options for legally forming a business. he/she can work as a:
Sole Proprietor - a business owned and operated by one person. As the owner of the business, the sole proprietor will be personally liable for any debts or taxes of the business or other claims.
General Partnership - a business run by two or more individuals; each partner has ownership of company assets and responsibility for liabilities.
Limited Partnership - a business with one or more general partners who are personally liable for debts and one or more limited partners who contribute capital and share in profits. With a limited partnership, one must file a Certificate of Limited Partnership with the Secretary of State and copies in counties where the partnership has places of business or…