Strongpreneur#Starting A Business
January 16, 2019 51
Strongpreneur#Starting A Business
January 16, 2019 51
The decision to set up a business of your own may perhaps be one of the most challenging decisions of your life. This is because it may involve you taking full responsibility for your own future particularly in respect of employment and income.
It has been a challenging appeal to many people; the challenge has been taken up by increasing numbers during the recession among retired and retrenched workers who have received their gratuities and other entitlements as well as ex-politicians following the collapse of the second republic.
An important aspect of the decision is that of becoming “your own boss”, working for your livelihood and profit. However before you commit all your resources to this new mission of yours and turn the venture idea into reality, it is pertinent to take realistic stock of yourself and of the business idea.
You need to know yourself more honestly and more objectively than ever before. This important diagnosis should prepare you to face setbacks and disappointments with determination to succeed and sustain long periods of work with probably little reward (the initial stage anyway) and even less free time than hitherto you have been enjoying.
You should also bear in mind that even with the strongest determination you are more likely to fail than to succeed. According to statistics one in every three new businesses within the first year of operation while a staggering four out of the five small businesses fail during the first five years.
This article on setting up a business should provide you with valuable tips for reducing the risk associated with small enterprises so that your own business does not form statistics in an adverse way. Throughout this article, you will be given opportunities to critically examine and say something about yourself.
There Are Four Ways of Owning Business
Starting a new business, buying an existing one, opening a franchise or ownership by inheritance, requires strategizing.
This is essential in that, just as a long journey will take a long period, so would a business which the owner hopes to run for years on end. The owner needs to design strategies of how to achieve the long-term objectives spelled out in its mission statement.
From the foregoing, there is an obvious need to strategize to compete effectively in one’s field and industry as will be contained in chapter six.
If you are determined to set up your business or continue with an existing one, an objectives self-study need not deter you easily, it should rather assist you in findings out what you have to do if you want to succeed in your business venture(s).
If you find it difficult to assess yourself as objectively as you can it would be helpful to ask a close friend or relation for a frank opinion as to your chances of success as a business owner.
After answering the question “Who Am I” you should try to answer other questions including the followings.
Studies of entrepreneurship in many parts of the world indicate that most successful entrepreneurs are married and that they generally have understanding spouses who provide moral and material support.
You will certainly need the support of your family if any and this should be considered as an important factor.
Basic Factors Related To Business Success
After your self-analysis, you should then consider in more details the basic factors needed to bring about success in your new business involving you becoming ‘self-employed’.
The basic factors that relate to business success are ideas, motivation, resources, and ability, which must be combined through planning and organization.
Working For Ourselves
If we work for ourselves there is no one to tell us what to do, how to do it, when, where or for whom etc. Once we work for ourselves we are not likely to be able to do everything we want to either. We may not be prevented a boss, but because we do not have the necessary equipment, adequate premises, self-confidence or sufficient money, we may not have the necessary skills.
Perhaps, more importantly, we may be prevented from what we really want to do because the customer does not want it and will not, therefore, pay for it.
So successful self-employment depends upon:
What Makes A Successful Business
1. The Idea
2. The Motivation
5. The Plan (Setting Up A Business)
6. Organization (Running The Business)
Basic Resources Needed To Start a Business
Every business (industrial or service) requires some basic needs for its operation. For example, a butcher would need knife, cutlass, axe and of course the animal to slaughter to satisfy his customers. And in the case of projects where materials such soya beans have to be processed certain basic needs have to be acquired to be able to operate effectively.
These basic needs whether in commerce, service or manufacturing are called resources. These are things which will assist in the achievement of what we plan to do.
The following are some of the basic resources.
How Can We Get These Resources?
When we use these resources in business, we pay for their use. What we pay for their use is the cost of the resources to the business.
Now we will examine the cost of using each of the resources we have mentioned.
Cash: It will be observed that the cost of the use of each to a business is the interest paid on the amount of money borrowed either from individuals or the bank.
Labor: There are two categories of workers. The management staff that stays in the offices to manage the business. The cost of this category of workers to the business is the salary and other financial benefits paid to them for their services. The other group is the semi-skilled and unskilled labor that works in the factory. The cost of using their services is the wages paid to them at the end of each day or month.
Land and Building (Premises): We can buy land and building with our money when we do this, we can no longer put the money in the bank to yield interest; the cost of the use of the building is the interest we can no longer earn in the bank. When costing our product, we must add the value of the interest as the cost of using the factory. On the other hand, we can let the business hire the building.
In this case, the business has to pay rent for the use of the building either monthly or annually. If we have no money to build our factory we on the money borrowed. The interest on the loan is a cost to the business. If we have no money of our own and we cannot get money to borrow from the bank, we can hire a building as a factory. In this case, we can pay rent to the landlord for the use of his building. Rent is also a cost to the business.
Plant and Machinery: The cost of use of this is the interest on the loan.
Raw Materials: The use of raw materials has a cost and this cost is the value of its purchase.
Don’t forget to share this post!