Business means the art of being busy. The aim of business is to earn profit. The higher number of industries has increased competition among the investors. Before starting the business, promoters must consider following factor in order to survive and expand the business.
1. Identification of business
The first factor that businessman must consider before starting a business is the identification of business. He has to decide about what type of business he wants to start. Identification and selection of particular business is very important for proper involvement and profit. It helps to give personal knowledge, interest, reduced level of risk, size and other values. It helps in expansion of business and earning the maximum profit.
2. Detailed investigation and research
Business cannot be started only by imagination. Proper and detailed study about the scope of business is very vital. It must consider present and future risks and competition. Market survey must be maintained. Investigation and study about raw material, finance, customer, market, employees and interest must be done.
3. Forms of business organization
There are different natures of business. The types of business vary with the differences in capital, interest, merits, demerits, risk sizes size and so on. It must be chosen from various different forms of organization like sole proprietorship, partnership firm, joint stock and so on.
4. Provision of capital
Capital means finance. Finance is the blood of business. Business cannot be established without sufficient capital. Volume of capital to be invested is dependent upon size of business firm. Source of capital must be properly taken into consideration. Capital is categorized into two groups.
- Fixed capital i.e. Land, building, furniture etc.
- Working capital i.e. Raw material, transactions etc.
5. Location of business:
Location means place where the business establishes. It is very difficult to migrate from location of business after it has been set up. Location of business where it has been established must have better transportation. Communication, water, electricity and other utilities. Production and distribution must have low cost and sales must be high to minimize the profit. Selection of location must be perfect.
6. Selection of staff:
Business deals with human activities. It is related to the utilization of people to perform different activities. It is also called staffing function. It helps in management of human resources. Human activities are the major source to determine the efficiency of business. Staff should be selected according o the nature of business. Success of business depends upon selection of staff. Capable, skilled, experienced and honest employees must be selected.
7. Office equipment:
Office is the place from where all administrative work of business has to be done. Therefore, office needs proper equipment, machines and resources. For accurate, speedy performance office setup must be good.
8. Government policy:
Government makes business policy for the welfare of people. It must follow the policy of government. It must know all the legal rules and regulation formulated by the government.