Steps in establishing a business
AS USUAL, it is a pleasure to be with you all again. I am sure you will all agree that in establishing a business, it is important to do things in the right order. Therefore, this week we will look at the logical order that should be followed in setting up a business to ensure its success.
STEP ONE – CONCEPTUALISATION
The person who desires to set up the business must come up with ideas regarding the product, type of business, size of business, etc.
STEP TWO – MARKET RESEARCH (MARKET PROBE)
Market research is done in order to be aware of customers’ needs, which the business will attempt to satisfy with the aim of making a profit. Market research is a systematic approach to collecting information, recording and analysing the information collected and adopting the information collected to fit the marketing plan of the business. The aims of market research are:
To find out what the public wants. To assess the likely volume of demand.
To discuss what will influence consumers, e.g., product name, style and colour of packaging, price, etc.
STEP THREE – IDENTIFICATION OF RESOURCES
Resources refer to the factors that will be utilised in producing the good or service. A decision must be taken as to the type of resources and where they will come from. These resources include the financial resources, man-made resources (capital), human resources (labour and enterprise), and the natural resource – land. Time is also a resource that must be considered.
STEP FOUR – CREATING A BUSINESS PLAN
A business plan is a written summary of an entrepreneur’s proposed business venture. It includes its operational and financial details, its marketing strategies, its management skills and abilities, etc.
The plan serves as an entrepreneur’s ‘road map’ on a journey towards building a successful business. It describes the direction the business is taking, what its goals are, where it wants to be, and how it is going to get there. A business plan is also used to attract lenders and investors and serves as a sales tool.
STEP FIVE – ACQUISITION OF FUNDS
Having already decided how much funds will be required for the business, the future business owner must decide how the funds will be obtained. Will it be by public means or will it be from a financial institution? If it will be from a financial institution, the financial requirements and the terms of repayment for the loan must be taken into consideration.
STEP SIX – OPERATION OF THE BUSINESS
You are now ready to begin producing or selling your goods and services. For this to happen, an organisational structure must be in place, and each department of the business must realise its role in the successful operation of the business.
This is where our lesson ends for this week. Next week, we will look forward to starting our discussion on the business plan. Do take excellent care of yourselves until that time.