Starting a business can be a great exciting idea for any individual, or an employed individual. It may be like a dream to come true. It may be due to the attraction of endless profit income or a possibility of getting freedom from 8 to 9 hours of routine office schedule or getting rid of reporting to the boss every day. However it could be a big dream, but most importantly you have to first believe on your dream and then follow a series of steps and various checks and counter checks, in order to make your dream come true.
The ground philosophy of any business revolves around the activity of providing or delivering any product or services to a target person who may be or is in need of it through a process of sale.
There is a series of important steps; you essentially have to go through, before making any business idea into a real working entity. These steps can be summarized as under.
- Nature of Business
The first step is to decide what your intended business is going to offer. Business activities are in general categories into three categories.
It is like selling time and expert knowledge. They are known as professionals or self-employed like accountants, IT, marketing, doctors, lawyers, travel agent, restaurant, transportation, and salon, etc.
- Trading, distribution, and Merchandising
They include retail, wholesale, trading or distribution activities, buying and selling goods, etc. examples are grocery, departmental stores, retail claims, online resellers, etc.
This activity involves the processing of various raw materials into a tangible and saleable product such as cars, gadgets, clothing and daily essentials.
- Whom you are going to sell
Just by creating a tangible product or service is not going to generate profit for your business. Unless there is someone is willing to buy it from you. If you plan to start any business and you know what to sell, study if there is a market for it. Identity who are your customers.
In many business activities, location is an important parameter as it makes continuous visibility before the eyes of the target customer.
- Working structure
Once you have decided what to sell, whom to sell and the place of selling, you decide about the structure of the entity of the business. The common types of business structures are.
- Sole proprietorship– You are the sole owner of the business.
- Partnership – You can share the business in the partnership of two or more persons.
- Corporation or Company– You can share the ownership of the business with a large member of persons as a shareholder. Such shareholding in your company may be partiality selected shareholder or through issue of share by a public offer.
They include the financial resource either cash or non-cash, which are required to start the business and its smooth operation. They are assets to purchase, renovation, lease/rent payments, and other operating expenses.
- Asset requirement
They may include land, building, plant, machinery equipment, furniture, and computers. You must make a list and their prices.
- Lease, renovation, and rent
When you consider renting the space, you have to make provisions for advance rent and security deposit Also you may have to spend on renovation and furnishing.
Next steps are to locate and identify suppliers to you which you are going to sell to others directly or after certain value additions.
- Operating Expense
There are certain expenses which are required before the actual starting of the business. They are called pre-operative expenses. The regular expenses are like salary rent, office supplies, and utilities, etc. These make an essential part of your capital requirement. Normally you have to keep provision for 6 months to 1 year of monthly spending as capital.
- Hiring People
Human resource management is one of the most vital parts of the business process. This may be one of the reasons why outsourcing has become much in demand. You must consider applicable rules and regulations in case you are hiring employees and in case of outsourcing the business functions, you must evaluate the expertise, experience, and reliability of the outsourced company.
- Registration and legal compliance
Make sure before starting any business make sure that you are registered with the mandatory licenses and another permit which are needed to legalize your business entity. Another important step which is often neglected is the government reporting and legal compliance. There are certain disclosures and information’s that you have to make before the govt. agencies as part of periodic returns monthly, quarterly and annual returns. They may be regarding your sales, income, labor positions and other types of corporate social responsibilities.
- Bank Account of the business
You must have a spate bank account in the name of your business entity for conducting business transactions. This is to simplify the record keeping and avoiding mixing of your personal accounting and business accounting.
Choose the right marketing platform for your business, because through this platform the potential and target customers would be aware of your presence in the market.
- Accounting and financial analysis
Always ensure to have a reliable accounting and financial reporting system is placed in your business Accounting and financial analysis are basically the languages of the business that till how your business is performing.
So above listed steps are some fundamental & basic parts of actions that you must take before launching any business idea into a real action