Entreprenuership is the capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses.
Many people are very interested in starting their own business.They want a career for a lifetime. Being an entrepreneur or a businessman has a lot of opportunities. Their goal is to earn profit by providing products and services everyone needs. If they are successful in carrying this task, they can build rewarding careers for themselves. But what is involved in putting up a business?
5 Considerations before Starting your Own Business
Be clear about what you want
Starting a new business may require a lot of hours of work.It will require monetary investments, and support from family and friends.
Choosing your business idea
Choosing a business idea should be something that you like to do and are really good at. It could be a hobby or a very particular set of skills you possess. Ask yourself if there is something that you really like or enjoy doing.
Take into consideration if this kind of business is going to fit well with your lifestyle, family and finances.
To succeed as a new small business owner, you do not necessarily need to invent something new or create something unique.
Potential to Generate Good Income
Does your business have the potential to generate good income?
Make sure that your business is going to generate income that not only will help you recuperate what you invested in it including your salary, but also give you a margin of profit.
You may need to consider different ways to keep your start-up costs low. Look for advice from another small business owner, a Small Business Administration expert, or a local financial expert in your area. You need to have some financial guidance to help you define a good business path.
Developing a Business Plan
You must develop a business plan. A business plan is like a road map for your business and its projections for the next 3-5 years. This plan doesn’t need to be a scientific research. It can be simple and flexible. You will probably see that your business plan can turn into a group of mini-plans. One plan will be needed per each aspect of your business such as: marketing, finance, sales, and staffing.
Seek Legal Guidance
You should seek legal assistance and guidance to register your business. Get an orientation about all the steps you may need to follow in order to register your business and obtain the local licenses to operate.
Make sure that you will comply and complete all the necessary permits before starting your own business.
The advantages and disadvantages in putting up a business
- PERSONAL SATISFACTION-means doing what you want with your life. To some persons, the greatest reward of working for your self is personal satisfaction. For example, if you like photography, you may start your own studio. Each time a customer are pleased with your work, you will received a personal satisfaction.
- INDEPENDENCE -You’ll be able to put your skills and knowledge to use, and you’ll gain personal satisfaction from implementing your ideas, working directly with customers, and watching your business succeed. You have more freedom in action because you are the one in-charge and make decisions without first getting approval of someone else.
- PROFIT-the profits of the business goes to the owner, being a self-employed, you are be able to control you income. Very often, increase in time and effort put into the business results in increase in income, this is not often the case when you work from someone else.
- JOB SECURITY-means the assurance of continuing employment and income Entreprenuer cannot be laid off, fired, or transferred to another city or can be forced to retire at a certain age because of company policy.
- STATUS-is a term used to describe a person’s social rank or position. Entrepreneur receives attention and recognition through customer contact and public exposure. It is the pride of ownership, because most people enjoy seeing their names on buildings, stationery and advertisements.
- POSSIBLE LOSS OF INVESTED CAPITAL-invested capital is the money that an entrepreneur put on the business. The riskier the business, the greater the profit potential, if it is succeeds, profits may be high, if not, invested capital will be lost. Most especially when individuals made loans to get the business started, it takes years to repay banks and suppliers.
- UNCERTAIN AND LOW INCOME-profits usually vary from month to month, unlike salaries and paychecks that are fixed. This is often the case during the first six to twelve months of operations.
- LONG HOURS-being the owner of the business, you are usually the one who works for a long hours. They do not punch time clocks and often the first to arrive in the morning and last to leave at night. Business hours are set for the customer not the desire of the owner.
- ROUTINE CHORES-running your own business involve chore like paperwork like record keeping for items such as billing, payroll and taxes. Maintenance and cleaning are the other chores that need to perform each day.
What is entrepreneur?
1. A French word meaning someone who undertakes something, used to mean someone who owns or runs a business
2. Someone who risks their own capital in a business enterprise.
What are the characteristic of a successful entrepreneur
Here are the list of characteristics of a successful entrepreneur:
- Moderate in taking risk-they are risk taker,they prefer to make things happen rather than let them happen by chance.
- Have self-confident-they believe that they can achieve their goals and not afraid to take chances.They are also realistic,they know their limits of what they can and cannot do.
- Hardworking-putting up a business is hard work that needs to accomplish like helping customer,keeping records, cleaning and attending to employees and purchasing.
- Goal -oriented-they set goals and plan to achieve it one at a time.
- Responsible-you answer or account for what happens on the business.You accept blame for failure and credit for success.
- Innovative-they introduce new ideas or methods.They are improving existing productsand servicesto create new ideas, products and services.
Three Ways to Become an Entrepreneur
1) BUYING AN EXISTING BUSINESS- considered less risky than starting your own business, especially if you can buy a well-managed, profitable business for the right price. Consider these advantages and disadvantages:
- Proven record-it has earned profit for the current owner and records are available to show what sales, expenses, and profits the new owner may expect.
- Established clientele-when buying an existing business, you have already group of regular customers who are in the habit of buying goods and services from the enterprise, thus, you will not have to spend so much time in developing clientele.
- Established location-a major problem in setting up a business is finding the right place to locate, buying existing business, will save you time and money in finding the proper location.
- Bank and supplier relationship-a local banker may be familiar with the enterprise because of dealing with the former owner, this relationship could help the new owner to have loan, as well as in purchasing from the supplier, you can continue doing so as the former owner arrangements.
- Trained employees-the buyer have acquired all the reliable employees. It is advantage because they know the products and services and customers.
- Established facilities-you are ready to do business, all needed equipment’s are installed, and the signs are in place so as the parking lot is paved.
- Poor record-why does the owner want to sell? Maybe because, the owner wants to put other business or maybe, it has record of losing money or problem expected in the future.
- Ill wiIl-bad reputation, maybe the owner may have treated customers and business person poorly. You have to change poor image to one is favorable.
- Wrong location-what once good location before may not be convenient nowadays.
- Poor physical condition-you will incur additional cost if you want to improve the physical condition of the business, building may have to be remodeled and equipment should repair.
2) STARTING BUSINESS FROM SCRATCH-means you will do all the work in establishing the business. Take a look of the advantages and disadvantages:
- Freedom in making decision-you choose when and how to get started, choose employees, suppliers, location, in short, you decide everything.
- Opportunity in developing images-you can develop favorable images from the start unlike buying existing business, the poor image is carried by the new owner.
- Choice in locating the business-deciding where to locate your business.
- Option in selecting physical facilities-you have the right amount of space in the layout you desire.
- No track record-it is brand new business, no track record
- No established clientele-you have to spent time to develop or attracting customer.
- Time-consuming task-it takes time to launch a business, from purchasing goods up to hiring employees.
- Difficulty in obtaining loan-bank usually prefers to lend to established businesses.
3) BUYING FRANCHISE-Business franchising is one of the safest and most risk-free ways to start up and run a successful business.
- Your business is based on a proven idea. You can check how successful other franchises are before committing yourself.
- You can use a recognized brand name and trade marks. You benefit from any advertising or promotion by the owner of the franchise - the "franchisor".
- The franchisor gives you support - usually including training, help setting up the business, a manual telling you how to run the business and ongoing advice.
- You usually have exclusive rights in your territory. The franchisor won't sell any other franchises in the same region, though there will be competition from other businesses.
- Financing the business may be easier. Banks are sometimes more likely to lend money to a franchise with a good reputation.
- Risk is reduced and is shared by the franchisor.
- Costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing royalties and you may have to agree to buy products from the franchisor.
- The franchise agreement usually includes restrictions on how you run the business. You might not be able to make changes to suit your local market.
- The franchisor might go out of business, or change the way they do things.
- Other franchisees could give the brand a bad reputation.
- You may find it difficult to sell your franchise - you can only sell it to someone approved by the franchisor.
- Reduced risk means you might not generate vast profits.
If you are to choose,in what ways you will engaged into business?
It is not always easy to create a business of your own,but with the eagerness and proper knowledge,you can be successful in the future. A good business is somewhat have a good foundation of love, effort, eagerness and proper mindset towards success.Time management and resourcefulness is also key to have an established business in the future.Believe in yourself that you can make it! Be positive always and all other things will be better.