Starting a Business

Launching a successful business is a complicated task that is persued by many people. A large number of people believe that entrepreneurs have more power over their personal lives unlike other people. At the same time, those people who own businesses are highly admired in the society because they are more willing to take risks and get more benefits as a result of it.. A lot of people are delivering their efforts to start their own businesses or establish their own companies. However, once necessary resources for starting a business are attained, a lot of uncertainties arise about further steps that should be taken in order to secure success of their initiative. Many of them end up failing to operate their businesses as a result of numerous factors. This paper provides information about necessary steps that should be undertaken when starting a business. It also discusses relevant laws that should be considered by new entrepreneurs before making any investment decisions. It is vital for people to understand the fundamental procedures and requirements for starting, managing and sustaining a business so that they can avoid common mistakes that lead to early failures of most businesses.

Steps of Starting a Business

Starting a business is the process that requires knowledge about necessary steps that should be undertaken to avoid failures or early bankruptcies. Naturally, the first step is considered to be the most important amng the rest. Without making a first step the entire initiative about starting a new venture would remain unnoticable. Yet, at the same time subsequent steps in the process of starting a business are just as valuable since they determine actual success of the business venture. Moreover, subsequent steps of launching a business are often found to be crucial in determining whether or not the business will succeed. Making mistakes at the primary stages of launching a business venture does not only mean incurring of enormous losses to the business owner, but also complete familure of business. It is, therefore, very essential to ensure that one starts a business by following guidelines on every step of the business launch. There are numerous recommendations that serve as a guiding tool for young entrepreneurs to make their business operate successfully and be compatible with already established competitors on the market (Fletcher 2012).

Business Idea

Having precisely defined business ideal is one of the determining factors of business ventures’ success. One needs to know what they want to achieve in their business in order to be able to put it into practice. After the business idea is clearly established, entrepeneurs need to conduct research to justify plausibility of thei ideas and their applicability in the business practices. Finding business opportunities is the process of devising one’s own business idea. Idea for a new business venture does not need to be unique. However, there is extensive evidence that having a unique idea is associated with higher success rate of new ventures due to smaller competition compared to a business that is based on the common idea that is already pursued by many other people. Moreover, business idea must be viable. In case when a business idea is not plausible for implementation, then any attempt to implement it would turn to a failure.

Choosing the Business Type

Implementation of the business idea requires clear understanding of the type of business that is going to be run. There are various types of businesses. Therefore, it is very critical for a person to know which type suits thie business idea in the best way. A person with vast knowledge in a given field may choose to generate income by offering services to other people, in which case service industry is their choice. Others may give preference to start a production business of manufacturing certain products and goods for consumers. In other cases, people may join the trade business and set up themselves as distributors, retailers or wholesalers, in which they handle manufactured goods for sale. When making a choice, it is crucial to understand one’s capabilities, capital and other business dynamics that affect managing their business.

Marketing

It is crucial to have understanding about potential consumers of their products and services. Starting a new business requires clear identification of the target audience of their products. At the same time they need to identify competitors for their business on the market. Starting a business before identifying consumers of any product is directly associated with failure. One needs to ascertain the market availability for their goods or services prior to the starting a business. This also includes a detailed analysis of the current market trends and competitive forces operating in the environment (Stafford 2011).

Consultation

As a new entrant into the business environment, there are many issues and requirement that a person ought to know before making any decisions. Conducting thorough market research is a requirement for a new business venture. In order to obtain relevant information a person may need help from experts or experienced market participants. At the same time, conduct of the market study can be accompanied with search of information about launch of similar business ventures. Mentorship, guidance and direction when starting any activity is crucial.

Starting Capital

Starting a new business is impossible without initial capital and other relevant resources. There are different sources for collecting initial capital for the business venture, including investments, personal capital, credit, etc. Starting capital is usually taking the form of financial resources. However, depending on the type of business, starting capital may also include different equipment and facilities to run a business (Fletcher 2012).

Business Structure

A business structure determines whether the new business operates as a sole proprietorship, association, limited liability company, partnership trust or cooperative. In order to choose the appropriate structure for a new business, a person needs to consider the legal costs, management requirements, tax liability, running costs and starting capital. Different business structures have their unique benefits, as well demerits. Essentially, a person can make a decision about business structure after a critical analysis of all prior considerations (Gaff & Fryzel 2012).

Business Location

The location of any business is particularly salient in the minimization of running costs. At the same time location is considered as a crucial factor from the perspective of consumers’ access to it as well as from the perspective of proximity to suppliers of resources. Customers must be able to get what they need with convenience. Customers’ satisfaction is one of the aspects of a sustainable business entity. Location plays a significant role in ensuring of this requirement (Stafford 2011).

Business Name

A good business name serves as a marketing tool for any business. It should reflect the main purpose of the business and be attractive to the target market. An attractive name is a brand on its own, and makes a business to stand out. It is crucial to choose a business name wisely so that it is identified with what the business stands for, and most importantly, what the business does.

Meet Legal Requirements

Legal requirements are different in different countries, or even regions within one country. The general requirements in legal terms include business registration, obtaining relevant licenses and observing stipulated tax obligations. Having necessary information about these aspects will ensure that one does not violate any laws that regulate business consuct (Fltecher 2012).

Important Laws that a Person Needs to Know Prior to Starting a Business

There are a number of laws that any business entrepreneur has to know before starting a business of any kind. Importantly, people need to be familiar with local laws pertaining to business development activities in their respective locations. They include advertising, labor, finance, intellectual property and privacy laws. Others include environment, workplace safety and health, online business and foreign workers laws (AllBusiness n.d). To get a business on the right track, an entrepreneur needs to have full information in respect of all the relevant laws.

Advertising Law

It is a legal requirement in most countries for advertising information to remain truthful. It should not mislead consumers about the business and its product. There are many laws that seek to protect consumers from unscrupulous businesses. It is recommended for the new business venture to make thorough research of all legal requirements that are associated with it.

Intellectual Property Law

Business owners ought to know the correct procedures of protecting their trade secrets, patents and trademarks. As a new entrant into the business, it is essential to have such knowledge to protect their ideas at the beginning to avoid any problems in the future. It is necessary to learn the correct procedures of safeguarding a business’ property since other people may misuse or steal it.

Employment/Labor Law

A person has the legal obligation to understand all regulations pertaining to employee compensation and the utilization of human capital. There should be no incidents of harassment or discrimination at the workplace. There is a procedural, contract termination process, and a requirement for safe working conditions for employees.

Online Business Law

Technology has opened new platforms for marketing and business of all business products. Any new, modern business would explore the use of the Internet for communication and a current marketing tool for their product. There are laws in place to guide this modern way of doing business. It is necessary, therefore, to learn about online business laws when starting a new business venture. This is crucial in complying with online security, privacy, taxation and copyright matters.

Environment Law

Businesses have substantial impacts on their surroundings. For that matter, different environmental management bodies (agencies) have rules and regulations that business owners must comply with, in their strife to sustain their business ventures. Companies must deal with issues of environmental pollution resulting from their direct or indirect operational capacities. They have to follow strict procedures in observing safe waste disposal management measures. New entrants must be aware of such requirements because the interaction with the environment is inevitable and constant, as long as the business is operational.

Workplace Safety and Health Law

There are various mechanisms in place to ensure safety of workers in their respective working environments. Business owners have to comply with the laws that offer guidance in respect of this obligation. As a new business owner, one must show the potential of meeting such requirement so that the venture could be launched successfully.

Privacy Law

A business owner must always maintain confidence of their customers. There are laws which seek to protect the privacy of the government and customers with respect to the information that a business obtains. It is utterly unacceptable to interfere with customers’ privacy since serious legal repercussions emerge from such incidents. Therefore, it is crucial to be aware about current laws that regulate privacy of customers and ways how a business ought to treat any information that customers provide.

Finance Law

Businesses ought to follow guidelines that pertain bankruptcy, securities and antitrust regulations. Anyone starting a business must be aware of such laws so that they do not collide with the law, at any given moment.

Foreign Workers, Employee Eligibility and Immigration Law

Dealing with people from other countries is one of the most critical issues that governments have to face. As a business owner, a person has to ensure that their recruitment process has proper mechanisms for verification of the legal status of each employee. It is illegal to hire illegitimate foreign workers in any business setting. Every business owner must have full information about the laws that govern employment of foreign workers in their business.

Common Pitfalls when Starting a Business

Research works show that only one out of ten businesses survives after launch. Ufortunately, it has been widely established that a great majority of new business fail soon after their lanch. A lot of new business go bankrupt as a result of failure to comply with necessary requirements of successful business launch (Entrepreneur 2006). When starting a business, people make dire mistakes that jeopardize the whole success of their ventures. Common pitfalls that people encounter include the following: failure to do adequate research; neglect of marketing; poor management of cash flows and poor propert management.

Failure to Do Adequate Research

According to Anthony Fletcher (2012), starting a business is both a science and an art. It requires skills to ensure that it succeeds. Without adequate research, business success is unattainable. Many people fail to consider this fundamental aspect of business planning. Consequently, many businesses only last a short while after their initiation.

Neglect of Marketing as an Aspect of Business Sustainability Strategy

A number of entrepreneurs leave marketing out of their business plans. This is detrimental to the business venture because there is a failure of considering target consumer groups for the business product. A lack of a stable market for a business results in the collapse of the business, as a whole.

Poor Management of Cash Flow

Many business owners have insufficient knowledge on how to manage their incomes and income sources. They do not have proper ways of keeping accurate financial records of businesses. Sometimes, it is caused by the failure to employ qualified personnel for such tasks or, as a result of sheer managerial incompetency. This has drastic implications on the sustainability of any business. Business revenue is a crucial factor in operating the company. Failure to manage it properly is a sign of trouble for the business.

Poor Property Management Measures

When a company fails to protect its property, it gives a chance to other mischievous business players to overtake it. Any business ought to secure its name and unique products using patents, trademarks and copyrights (Martino, 2012).

Conclusion

Starting a business is one of the most challenging tasks. Starting a business that would obtain stable, sufficient income-generating sources is hard in the modern environment. Currently, a great majority of new business ventures fail because of a lack of consideration for all requirements prior to the start of businesses. Young entrepreneurs have to follow all conventional guidelines of new business venture in order to avoid the mistakes that are typically made by most business owners. They must understand what are the right measures to consider instead of simply rushing into the market. They must consider all potential limitations and challenges that business activities will experience, as well as ways of overcoming them.

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