Process of starting up a business - Coggle Diagram
Process of starting up a business
Organizing the basics
The entrepreneur must answer some basic questions
Where is the business going to be based?
How will the entrepreneur name the business?
What will be its legal structure?
What will be its operational structure?
Researching the market
To determine how the business will distinguish itself from others in the market
It is difficult to find a gap in the market
The entrepreneur must answer some basic questions:
How will he or she conduct market research?
Who will be the target market?
Can the new business have its concept?
What will be its “unique selling proposition”?
Planning the business
The entrepreneur should write a business plan
document that addresses all the issues that need to be planned before operations begin
It serves multiple stakeholders
Potential owners of the business and financial institutions that may provide capital
Establishing legal requirements
All businesses operate in countries that have laws that can influence the legal organization of the business
Its labour and operational practices and determine tax obligations
In most countries all businesses must be registered even if a sole trader (not legally separated)
Raising the finance
It is necessary to get the business started and to support the business
Until it can sustain operations from profits (it can take years even if it is successful at the beginning)
Investor/ lender must have confidence in the accounting and auditing procedure of the business
Testing the market
The final stage is the launch of the business
In capital-intensive manufacturing the initial launch is extremely expensive and the firm can respond to market reactions in only a limited and slow way
Purpose: verify that the business idea will be well enough received by consumers to suggest that the business has a reasonable chance of success