The time in the process of starting up a business will vary from one country to another. In some countries like Singapore, it will take only a few days to register a new business enterprise, while in some other countries in South America or Africa, the bureaucratic process of registering a business may take over 100 days. China is going to great lengths these days to shorten to time necessary for business registration making it easier for more people to set up their own businesses.
Nevertheless, there are common steps in the process of starting up a business that are quite similar across all geographical locations.
1. Come up with a feasible business idea.
Ideas for a new business come from many different sources. It might be done by identifying and catering to unfilled gap in a market, by providing products that have a Unique Selling Point (USP), or by entering existing markets (although these may be saturated, so the chances of success might be lower). Amazon, the largest Internet company by revenue in the world selling books and electronics online, and Dyson, a leading producer of cordless and bagless vacuum cleaners, are great examples of successful businesses based on innovative ideas.
2. Write a short business plan.
Once the entrepreneur has a feasible business idea in place, it should be officially written down in a business plan. In addition, the business plan will include the aim and business objectives for the new business in the long-term and in the short-term, along with an outline plan of how the business is going to accomplish its business objectives.
3. Obtain start-up capital.
Starting a business and running a business requires constant supplies of money. Owners of small business will use their own savings or obtain loans from banks to finance their start-ups in the first few years of operations. The loan process can take several months to complete, with the lender usually requesting a completed business plan before any funds are approved. Later on, finance will be needed to fund business activities, such as manufacturing and marketing of the firm’s products. Although finance is usually the key barrier to setting up a new business, there are plenty of sources of finance than entrepreneurs can consider when starting up their businesses. Record keeping of financial accounts needs to be done according to the legal requirements, therefore many firms hire certified accountants to help them do this.
4. Finalize formal procedures at the government to register the business.
Before a business can trade or hire workers legally, it must satisfy registration and licensing requirements. The owner(s) must also register the legal status of the business such as the type of business organization (e.g. sole trader, partnership or private limited liability company).
Other legal issues that come from the legal environment of the business must also be considered, e.g. consumer protection laws, copyright and patent legislation and employment rights. If the business does not operate according to recent rules and regulations and infringes legal issues, it can present huge problems for a business, e.g. employees can sue the business, or in the worst-case scenario, the government may require to cease all operations.
To operate legally, the business must also open a corporate bank account
To facilitate the financial operations of the new business. This allows the business to pay for its costs of operation and to receive payments from customers. Almost all banks offer business bank accounts, and almost all business bank accounts offer online banking facilities too, so handling money transactions is very easy nowadays.
5. Buy initial Fixed Assets such as buildings and equipment.
The location decision is also a crucial, but a problematic one. Running a coffee shop or a retail store in a popular location increases the chances of attracting customers and improves brand image. But, the cost of land and property, or rent, is much higher than on the suburbs of the city. Smaller cities usually offer cheaper real estate prices than bigger cities or in the capital of a country.
6. Hire workers when necessary.
Human resources are needed at all stages of business activity, from the design and Research and Development (R&D) of a product to shipping in it to the consumer and handling after-sales services. Entrepreneurs have to consider the need for hiring, training, retaining and motivating their workers to remain successful. There is a saying that it is not customers who are the most important stakeholder for a business, but employees. It is because the employees are the ones who create and deliver the products and services to the customers. So happy workers, mean happy customers as well.
7. Find suppliers of raw materials, finished stock of products and support services.
Negotiations over issues such as prices and delivery times are needed to be undertaken with suppliers. All in all, without a steady supply of reliable raw materials, the company will not be able to produce quality goods and provide services.
8. Do basic marketing.
Marketing is essential, irrespective of how good a business idea might be, to convince lenders and buyers that the product is a winner. Potential customers need to be identified and found. Those customers need to be attracted because without them the business will fail as it will not be able to generate any sales revenue. Attracting customers might be done by using market research to create products that are desirable (fulfil needs and wants), available at the right prices and sold in the right places. The customers also need to know about the business and its products. This is done through the marketing activities of the new business, such as advertising and other promotional materials. For many businesses, marketing will also include establishing a presence on the internet as E-commerce is an important distribution channel these days. Having an effective website and/or an online store is essential to capture business opportunities with new customers and to establish credibility around the world.
Entrepreneurial skills are required to successfully plan, organize and manage the business organization. Effective management and leadership, and negotiation skills are required to deal with different stakeholder groups such as employees, suppliers and the government. Entrepreneurs must also have self-confidence and a passion for what they do.
