Aims and Objectives of Business Start Ups
Any business which is set up has the primary objective of growth and making profits in the business.
The business plan is an outlay of the proposed objectives of the business start up. It's made up of several strategies for success.
The mission statement is where the business defines the activities and purpose of the business. Sometimes it can be written down and at other times it remains verbal. Over time and with sustained business growth, these mission statements become more formalised.
New business enterprises have to take a level of risk in order to establish in any market. Hence, there's the need to make calculated effort to embark upon activities that will yield profit for the business when compared to the level of risk involved.
Due to the competitiveness in the market, a business must identify its strengths, and weakness. It also must know its threats and the possible opportunities available to it for success. This whole assessment of the strengths, weakness, opportunities and threats is known as a SWOT analysis.
Benefits of a Small Business
Identification of potential new market opportunities, identification of strengths upon which to build, identification of weaknesses which can be improved upon, identification of threats to the existing business, perhaps from competitors.
Strength - Internal, Positive. Staff, customer base, market position, financial resources, sales channels, products or services, profitable and growing.
Weakness- Internal, Negative. Staff, profit margins to low, financial resources, competitive vulnerability, market position, lack of new products or services, sales channels.
Opportunities- External, Positive. New complimentary market, strategic alliance, funding, sales, products or servies, market posed for growth, competition weaknesses.
Threats- External, Negative. Economy, lose of key staff, lack of financial resources, cash flow, new technology, increased competition, new government regulations, falling sales, decreasing profits.
Strengths and Weaknesses of Business Ideas or Plan
Business plans help companies to summarise and co ordinate their action plans for success into practical and feasible goals.
Through the business plan, the market research for a new business is conducted. It also outlines the financial planning and sources from which it can obtain necessary assistance. A business plan shows what services and products are o be produced by the enterprise.
Business plans ensure that adequate planning is made by the business. This prevents a loss of business direction and keeps the new start up focused on the right track for success.
Marketing plans are incorporated into the business plans and shows how the business intends to utilise its marketing to optimise market success.
In instances where businesses fail, it is down to the entrepreneurs and how they manage and plan the business.A lack of appropriate and relevant skills to manage the business and execute its plan of action often leads to the failure of the business. Failure to organise and lead through motivation and hard work leads to problem.
Risks Involved with Business Start Ups
Several risks are involved in starting a new business. From location, to investor needs, to building a client base and finance are mitigating factors that show the levels of risks which are involved in business start ups.
The cash flow of a new business differs largely from that of a well established business. Through the assistance provided by banks and financial institutions through loans, overdrafts and other facilities, this can be dealt with.
It's not always very easy to get finance depending on the type of business. For instance, limited companies are given preference over sole traders.
Intense competition in the market can create strong barriers for new businesses. They tend to have to carefully market and source a strong client base. This is a process which happens over a period of time and in order to retain the best clients, the business must prove that it's worthy of becoming a player in the market and a force to be reckoned with in business.
Location is very important and can make or completely destroy a business even before it has started.
The right location creates the right marketing and attraction factors for the business.
Furthermore, it enhances the image and exposure of the business.
It's futile to enter a competitive market and fail to make attempts to be recognised.
The results of such lead to repeated failures in the business.
Failure Of Business Start Ups
Th new business is faced with changes in the market which have direct impact on its performance. The change in costs of the business and levels of demand for the products are important in determining business failure.
Several factors can also lead to the success or failure of the business including changes in lifestyle, advertising levels, income of the customer base, population changes, implications of laws on the business, price of the product, skills of competitors.
In addition to the above, it's important that reliable suppliers are used by the business. When businesses are new to the market, at times it's trial and error to find good reliable suppliers that will lead to formation of a strong alliance and have a positive impact on the business.
Bad suppliers will have a negative impact on the business. They create unnecessary delays and inevitably lead to a rise in the prices of the products.