6 Essential Steps to Establish a Business

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Questions and Answers

What is the first essential step in establishing a business?

Conceptualizing

What is the purpose of the research (market probe) step?

To find out if there is a definite need for the product or service and to collect information about the potential market.

What resources need to be identified in the third essential step of establishing a business?

Land, labour and capital requirements, and the location of the business

Why is creating a business plan important?

To indicate, with evidence, whether or not the business is viable and likely to prove profitable. Signup and view all the answers

What are the two main sources of funds to start a business?

The entrepreneur's own resources and someone else's resources (borrowing) Signup and view all the answers

What is the opportunity cost of using one's own funds to start a business?

The loss of what those funds could have earned in some other way Signup and view all the answers

What is essential to keep existing customers and attract new ones in the operation of a business?

Ensuring that the goods or services being marketed are of a high standard Signup and view all the answers

What is the ultimate goal of the six essential steps in establishing a business?

To create a viable and profitable business venture Signup and view all the answers

What is the primary goal of a business beyond mere survival?

growth Signup and view all the answers

What is the first step in registering a business?

Decide on a company name and conduct a thorough name search Signup and view all the answers

What are the three main documents that must be submitted when registering a business?

Memorandum of Association, Articles of Association, and Declaration of Compliance Signup and view all the answers

What is one of the benefits of registering a business?

The business would have a unique name that no other business can use Signup and view all the answers

What is a business plan, according to definition (1)?

A written document that describes the rationale for starting a business and the steps involved in starting and operating it successfully Signup and view all the answers

What is one of the key elements of a business plan, according to definition (2)?

Analysis of competition, market, operating expenses, management, staffing, production and finance Signup and view all the answers

What is the purpose of a business plan, according to definition (3)?

To set out the objectives of a business and key details about its future running Signup and view all the answers

Who is a business plan typically written for?

The owners and managers of the business Signup and view all the answers

Study Notes

Essential Steps in Establishing a Business

Establishing a business involves six essential steps: conceptualizing, research, identification of resources, creation of a business plan, acquisition of funds, and operation of the business.

Conceptualizing

Every business starts with an idea to identify a need in the market or improve an existing service or product.

Research (Market Probe)

Research is conducted to determine the need for a product or service and collect information about the potential market.

Identification of Resources

This step involves identifying the resources needed to operate a business, including land, labor, and capital requirements, as well as the location of the business.

Creation of a Business Plan

A business plan is a crucial document that outlines the viability and potential profitability of a business, using evidence.

Acquisition of Funds

Funds to start a business can come from the entrepreneur's own resources or from someone else, and the cost of borrowing or opportunity cost must be taken into account.

Operation of Business

The business must be operated efficiently to ensure high-quality goods or services, customer satisfaction, and economic cost.

Steps in Registering a Business

Decide on a company name and conduct a thorough name search to ensure availability.
Determine the company's corporate status, public or private, and whether it is limited or unlimited.
Submit necessary documents, including Memorandum of Association, Articles of Association, and Declaration of Compliance.

Benefits of Registering a Business

Registration provides a unique business name, preventing others from using it.
Customers recognize a registered business as legitimate.
Registration determines the legal structure of the business.
A registered business can access loans, bid for contracts, and undertake business transactions.

Business Plans

A business plan is a written document outlining the rationale for starting a business and the steps involved in starting and operating it successfully.
A business plan defines the entrepreneur's goals and objectives, analyzing competition, market, operating expenses, management, staffing, production, and finance.
A business plan is a formal document outlining the objectives of a business and key details about its future operations, written for the owners and stakeholders.

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Description

Learn the essential steps to set up a new enterprise, including conceptualizing, planning, and more. Understand the logical order to create a successful business plan.