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This document discusses seven key factors to consider before starting a new business: 1) assessing market demand and conducting market research; 2) preparing sufficient financial capital; 3) gaining relevant knowledge and expertise; 4) understanding competition; 5) choosing an optimal location; 6) complying with laws and regulations; and 7) acquiring adequate human resources. Conducting proper planning in these seven areas is important for setting up a new business venture that has the greatest chances of success.
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- 1. B畉NG NH GI THNH VIN TRONG QU TRNH TH畉O LU畉N NHM Nh坦m: 4 M担n: Ti畉ng Anh 3 L畛p h畛c ph畉n: 1401ENTH1611 STT H畛 v t棚n Nh畉n x辿t 1 Giang Th畛 B鱈ch Ng畛c A 2 Tr畉n Th畉o Nguy畛t A 3 Tr畉n Th畛 Ng畛c A 4 畛 Th畛 Ng但n A 5 畛 Th畛 Kim Ng但n A 6 Nguy畛n Th畛 Ninh A 7 Nguy畛n Th畛 Nguy棚n A
- 2. Outline Introduction 1. Market and market demand 2. Finance/capital 3. Knowledge/expertise 4. Competition 5. Location 6. Law and rules 7. Staff/man power Conclusion
- 3. Many people see starting a business as something that they will never be able to do because of finances, interest or knowledge However more and more people are beginning to open their minds to new business ventures. It seems like it is popular move. By opening a business there could be huge profit to be made. On the other hand, there are some risks and losses that may occur so you should consider carefully before setting up a new business. It requires hard work from the business founders and presidents. This paper will talk about the general things which need considering before starting a new business. 1. Market and market demand. Many companies become more and more popular and competition is fierce. This means the idea of companies working to get money and customers before other companies get them. First, you need assess market demand. Assessing market demand is one of the most important ways that businesses decide what to sell and how to go about selling the products they produce. It will help you to develop effective strategies to promote and sell your product to as many potential customers as possible. A business should estimate what its share of the market could be in order to assess its business potential. Once you have analysed the entire potential market for your product, study the competitors and their customers. Then gauge what amount of this market you can realistically see your business capturing. Properly assessing the market demand for a given product is very important. Failure to accurately project the desirability of a good or service can lead to production levels that are in excess of the number of units that will actually be sold. As a result, the company is left with a huge inventory of finished goods that generate no profit at all. In some cases, failing to
- 4. project market demand properly is enough to force a company to go out of business. Second - market research. The original concept is the basic ideas for something. In designing products and services, market research -finding out what people want - is of course very important. This may involve questionnaires or surveys with question about what people buy and why, perhaps with interviews in the street or by telephone. There may be consumer panel and focus groups, where ordinary people meet to discuss product ideas informally. Because market demand can change over time, own companies invest resources in constantly checking the current status of consumer wants and needs. Keeping the interest of current customers by making improvements to existing products and possibly introducing new products that are also of interest to those same customers and perhaps the researchers will make sales forecasts estimates of how many products will be sold. 2. Finance/ capital To start a business, if you only have good ideas and accordance of market demand is not enough to implement your business plan, you need to have good preparation of financial capital. What is the capital? - Financial capital is money used by entrepreneurs and businesses to buy what they need to make their products or provide their services to areas of the economy where their activity is based on, such as retail, corporate, investment banking, etc It includes: 1. Financial assets or the financial value of assets, such as cash. 2. The factories, machinery and equipment owned by a business and used in production.
- 5. Capital for a small business is simply money. It is the financing for the small business or the money used to operate and buy assets. Should very small businesses even worry about their cost of capital? The answer to that is absolutely yes! Even very small businesses need money to operate and that money is going to cost something. Companies want that cost to be as low as possible. Why is Capital Important? In order to build new plants, buy new equipment, develop new products, and upgrade information technology, businesses have to have money or capital. For every decision like this, a business owner or Chief Financial Officer (CFO) has to decide if the return on the investment is greater than the cost of capital or the cost of the money it takes to invest in the project. Business owners do not usually invest in new projects unless the return on the capital they invest in these projects is greater than or at least equal to the cost of the capital they have to use to finance these projects. Cost of capital is the key to all business decisions. How do you prepare the capital? To estimate the amount of capital needed to start a business, business owners must check the market and plan as detailed as possible. Then calculate an appropriate number. In addition to raising capital from relatives, friends, you can seek financing from collaborators, partners and customers in many different ways. You also have to consider alternatives to bank loans. The terms and conditions for borrowing funds will need to be studied such as the cost of borrowing, security required, rate of interest and the repayment terms. The owner will need to approach a number of banks to get information about their terms of lending and draw a comparative analysis to identify which funding is the most beneficial for him. 3. Knowledge/expertise
- 6. If you want a company, you need to have extensive knowledge of all areas such as markets, finance, funding, legal issues ... understanding of the social movements so that you can timely resolution of issues that may impact your company. Also you need to have good communication skills which will help you a lot in finding business partners, investor Experience life as a condition to help you grow. Once you solve the job is when you integrate yourself more experience accumulated over the course of your study, work. Working style is also important to help your company create. Whose nimble style, vivacious, open, sociable will be more successful than people with poor behavior. 4. Competition When starting a new business, we have many things to do and think. One of them, the completion is always happened. We cant avoid it. The question which needs to be answered is What is unique about the product / service which will be offered to survive the market competition? Information such as who are the competitors, what is their market strategy and what factors are required to compete with them are important. You need to reduce the completion, here are some suggestion: First, You must find the companies which have the same products with your company and you should focus on the large companies or the top companies of strength. Second, find the quality of products which those companies provide. You should find the price of goods then you compare between your company and the others to raise a good price. Third, dont forget the communication. It is very important to give our products to customers hand. You should focus on marketing. It will bring you the good opinions of customer. 5. Location A good location goes a long way in making the business successful.
- 7. The location needs to be carefully chosen. Some places have advantages over the others. You can save out on taxes, water and electricity costs if you are located in some areas. The raw materials can be easily sourced, the manpower would be easily available and you can save out on transportation costs in case of certain locations. Setting up a business in certain location could lead to subsidy and rebates from the Government. In the case of a retail business one needs to be located in a well-populated area and one which is easily accessible. Certain niche products / services of different competitors are available at a single location. 6. Law, rules on setting up a new business. We know that to participate in the relations the enterprises need the compulsory rules which help the government supervise them better: First, they must be established lawfully. It means they need the legal business license and business registration. Second, they have a well-organized structure and possessing property independent from that of individuals, organizations. They must bear own liability with such property. In the end, they independently enter into legal relations in own name. 7. Staff- human power Human resource is one of the most important problems that the founder needs to concern about when starting their own business. Therefore, preparing human resources is essential. First, we make a list of necessary departments and estimate the suitable numbers of employees. Second, we give technical requirements to each position. Final, we employ disciplined people, train professional employees and give them advantages working environment to develop their abilities so that the effect of work will improve.
- 8. In conclusion, there are many things which need considering before setting up a new business, but in our opinion, there are seven important factors that mentioned. We hope this paper will help you in the future when you have ideals to open a new business. TI LI畛U THAM KH畉O http://bizfinance.about.com/od/startyourownbusiness/a/How_to_Start_a_ New_Business.htm https://www.gov.uk/set-up-business-uk/overview http://www.moneysupermarket.com/c/news/top-tips-for-setting-up-your-own- business/0012363/ http://www.thisismoney.co.uk/money/smallbusiness/article-1583963/A-guide- setting-business-starting-company.html http://www.yourzenlife.com/post/10-key-factors-in-starting-your-own-business http://www.smallbusinessbc.ca/starting-a-business/understanding-your-competition http://www.careerbuilder.com/Jobs/Company/C8C3316B6PXVWV26W SN/Staff-Management/ http://www.slideshare.net/RonRomero_LSG/10-important-factors-to-consider- before-starting-your http://www.bls.gov/ooh/management/financial-managers.htm
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