Tips for business

A business enterprise comes into existence due to the pioneering efforts of entrepreneurs. However, there are several issues and problems faced by entrepreneurs while giving shape to their idea. These are as follows: (a) Selection of business:- The entrepreneur might be having a very good business idea. However, successful implementation of the idea into business activity involves a painstaking exercise. First of all, he/she has to study the market to know whether the idea of products or services could be accepted by the market. For the purpose, the entrepreneur has to determine the market demands of the intended products/services and carry out exercises to find out the projected costs of the product or services. In this way, the entrepreneur shall be able to know as to whether the venture is profitable or not. This systematic exercise is known as a ‘feasibility study’ and presented in the form of a report known as ‘Feasibility Report’ or ‘Project Report’. Not only that, an entrepreneur may conceive a number of ideas and identify many new business opportunities. In view of limited resources he may like to give shape to most the profitable one. The feasibility studies shall help him/her to identify the same. (b) Choice of form of business enterprise: There are various options available to the entrepreneur as far as the choice of form is concerned. He/She may go in for sole proprietorship, a partnership or a joint stock company. The choice is rather difficult issue. However, there are certain lines of business where one has no choice. For example, take the case of banking and insurance. These can only be taken up by the joint stock companies. The size of the business will determine the form of organisation. Apparently, company form of organisation is suitable in case of large-scale operations,while sole proprietorship or partnership is considered more suitable for small scale and medium scale operations. (c) Financing: The problem of arranging finance always troubles the entrepreneur. As you know, without capital no business activity can be started. Capital is needed for the entrepreneur to buy fixed assets like land and building, machinery and equipment etc. Further, finance is needed to meet day-to-day expenses of the business. Having built up the estimate of the amount of capital required, the entrepreneur may have to arrange finance form various sources. Many financial institutions like IFCI, IDBI etc. are providing ‘seed capital fund’ or ‘venture capital fund’ for the financing of good entrepreneurial ventures. So, the entrepreneur shall have to approach these financial institutions and bankers for the purpose, provide some funds on his own and plan for a public issue of capital at the appropriate time. (d) Location: The problem of locating the business unit is another issue for consideration that should be carefully handled by entrepreneur. Location of a business unit depends upon many factors like availability of raw material, availability of transport, power, water, nearness to market etc. The government also provides many incentives in the form of tax holidays, rebate in power and water bills etc. to the unit located in a backward area or underdeveloped area. Thus, the entrepreneurs need to look at all these factors before setting up a business unit. (e) Size of the unit: Size of the business is influenced by several factors like technical, financial and market considerations. When entrepreneurs feel that they can market the intended products or services and can raise sufficient amount of capital, they can start their operations in a big way. Generally, the entrepreneurs may start their operations on small scale and expand gradually. There is no doubt that if an entrepreneur starts on a small scale, it is easier for him/her to adapt to changes without much risk as huge investments will not be blocked in permanent assets. However, in the changing business scenario, many entrepreneurs start their ventures on large scale and are prepared to take big risks. Of late, many new entrepreneurs, particularly technocrats (who are professionally trained and employed) have joined in the economic development after leaving their lucrative jobs and started their new ventures in a big way. (f) Machines and equipments: The choice of machines, equipments and processes is a delicate problem before starting a new venture. This depends on various factors like availability of funds, size of production, and the nature of production process. The emphasis should be placed on productivity. Availability of facilities of repairs and maintenance, availability of spare parts and after sale service are also an important consideration while selecting a particular equipment and machinery. (g) Suitable manpower: If the size of business is large, the entrepreneur has to find suitable competent persons for various functional areas. He/She has to identify the right persons for each area and motivate them to join the set up. It is not that easy. It involves a lot of patience and persuasion. Thus, the entrepreneur has to find solution to many problems and issues while launching a new business. The success is ensured by making proper choices and arrangements.