Business means dealing with risks. Risks can cause lower profit, no profit and even loss. Therefore, the start of a business needs careful planning to ensure success and longevity. Important factors for consideration for starting a business are as follows:
1. Selection of line of business: The first thing to be decided by any entrepreneur of a new business is the nature and type of business to be undertaken. He will obviously like to enter that branch of industry and commerce, which has the possibility of greater amount of profit. The decision will also be influenced by the customers' requirement in the market and also the kind of technical knowledge and interest the entrepreneur has for producing a particular product.
2. Size of the firm: Size of the firm or scale of its operation is another important decision to be taken at the start of the business. Some factors favour the large size whereas others tend to restrict the scale of operation. If the entrepreneur is confident that the demand of the proposed product is likely to be good over time and he can arrange the necessary capital for business, he will start the operation on a large scale. If the market conditions are uncertain and risks are high, a small size business would be a better choice.
3. Choice of form of ownership: In relation of ownership, the business origination may take the form of a sole proprietorship, partnership, or a joint stock company. Each form has its own merits and demerits. The choice of the suitable form of ownership will depend on such factors as the line of business, capital requirements, liability of ownership, division of profit, legal formalities, continuity of business, transferability of interest and so on.
4. Location of business enterprise: An important factor to be considered at the start of the business is the place where the enterprise will be located. Availability of raw materials and labour, power supply and services like banking, transportation, communication, warehousing etc. are important factors while making this choice.
Yogita Ingle 4 years, 2 months ago
Business means dealing with risks. Risks can cause lower profit, no profit and even loss. Therefore, the start of a business needs careful planning to ensure success and longevity. Important factors for consideration for starting a business are as follows:
1. Selection of line of business: The first thing to be decided by any entrepreneur of a new business is the nature and type of business to be undertaken. He will obviously like to enter that branch of industry and commerce, which has the possibility of greater amount of profit. The decision will also be influenced by the customers' requirement in the market and also the kind of technical knowledge and interest the entrepreneur has for producing a particular product.
2. Size of the firm: Size of the firm or scale of its operation is another important decision to be taken at the start of the business. Some factors favour the large size whereas others tend to restrict the scale of operation. If the entrepreneur is confident that the demand of the proposed product is likely to be good over time and he can arrange the necessary capital for business, he will start the operation on a large scale. If the market conditions are uncertain and risks are high, a small size business would be a better choice.
3. Choice of form of ownership: In relation of ownership, the business origination may take the form of a sole proprietorship, partnership, or a joint stock company. Each form has its own merits and demerits. The choice of the suitable form of ownership will depend on such factors as the line of business, capital requirements, liability of ownership, division of profit, legal formalities, continuity of business, transferability of interest and so on.
4. Location of business enterprise: An important factor to be considered at the start of the business is the place where the enterprise will be located. Availability of raw materials and labour, power supply and services like banking, transportation, communication, warehousing etc. are important factors while making this choice.
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