Factor to be considered when setting up business enterprise
With all this excitement, it is possible for one to just jump into business without prior planning. Lack of proper initial planning can be disastrous to the business owner(s) in the long run when the truth about the business environment sets in. The following are the factor to be considered when setting up business enterprise:
1. Location of the Business: Location of a business is an important element before one starts the business. The location is determined by one's residence, the existence of similar businesses in the area, the distance between one's area of residence and the business, the population of the area, and the demographic. All these factors play an important role in determining the success or the failure of the business.
2. Competition: Competition comes from other people doing the same business. You should research how the competitors run their businesses, who their customers are, their pricing strategy, how well they do it, and their challenges. Their mistakes should be your strong points so as to outdo them.
3. Target Market: Who are your consumers? What particular product do they prefer? What after sale service do they appreciate? These are the things that you should consider. After that, you should tailor your business to match up to the above factors.
4. Startup Capital: Starting a business requires an efficient source of capital considering that some unexpected needs arise with time. Some of the options that one would consider would be getting money from family and friends, getting a loan from a bank, or even finding a willing investor.
5. Naming of the Business: The name of the business is usually the first thing the customers get to know about. This step, therefore, requires a long thought since once the business picks up, it would be hard and expensive to change it. The name will also coincide with the businesses website and web domain.
6. Financial Management: Before you could start a venture, it is very crucial to have a clear financial plan on how you will manage your finances, or how you will hire someone to do so. Financial management requires a professional accountant who understands the balancing between the inputs and output. It is very easy to think that the money in the business is enough, only to end up using the capital for the wrong purpose.
7. Possible Partnerships: Partnerships usually help in terms of expanding one's customer base, getting lessons concerning starting or running a business, and various elements required for a business startup.
8. Online Presence: Nowadays, everything is done online, from the start to the growth of the business. Before starting the venture, you should have plans of creating a business website or a blog, creating a twitter, Facebook, and Instagram account, and much more. These are main areas where people get to know about your business. You could also use these channels to chat and speak directly to your clients. A business website is the face of the business.
9. Legal Requirements: Different businesses require different legal considerations. For instance, a business dealing with foodstuffs would be required to provide a safety license. To be on the safer side, you should make sure that you have set terms and conditions that ought to be signed to avoid any inconveniences. The local authority takes care of offering such licenses, so you should make sure that you acquire one. There are more legal considerations to take care of, so make an effort to talk to a legal advisor to clear any doubt.
10.Education, Experience, and Skills: Going into a business with no experience, or skills or even knowledge on that particular field could be very dangerous. Wearing designer clothes does not mean that you know how to run such a business. Before going in a business, make sure that you have prior experience, or the required knowledge needed to do that venture.
11.Return on Investments: The ROI is got by dividing the Net Profit by the Investment. During the start of the business, the Return on Investments is usually low, then rises as the years go by. For a business to be successful, the Return on Capital should be bigger than the interest rates earned from a bank deposit.