Factors of Stating Business


Before starting a business, the market is surveyed to know which goods are in demand. The businessman also selects a business which is suitable to him and which he can organize well.

Size of Business

The businessman must keep in view the volume of business. He decides whether he has to do business at small scale or large scale. He may limit his business at the local level; and by adopting the business of a wholesaler, he can extend his business to other market.

Form of Organization

After deciding the size of business, the business man has to plan about the form of organization. He decides whether he has to start business as a sole-proprietor, or as a partnership or in form of Joint Stock Company..

Suitable Location

Suitable location facilitates business and guarantees its success. The premises where following facilities are available are considered best for business: with sufficient supply of raw material, an easy approach to the market for the sale of goods, water, power and quick means of transportation and protection against risks and accidents.

Concession from Govt.

In some enterprises Govt. allows some concession or rebate income to X or in excise duty. In some kinks of business import and export policies are lenient. All these concessions are kept in view before starting a business.

Reading: Advantages of Partnership

Arrangement of Capital.

Capital is arranged according to the size and bulk of business. Even after the business has Started capital is required for the purchase of raw-material and for the payment of wages and taxes and for miscellaneous, purposes. Capital is arranged keeping in view all these requirements.

Business Policy

Policy is framed before the actual commencement of business. Determination of method of payment and receipts, formula and technique of production are most essentials for the successful business. Future prospects are to be regarded according to the rate of growth. Anyhow policy generally depends upon the nature of business, rate of profit and situation of market.

Availability of a Administrative Personnel and Skilled Workers

If machinery is arranged in business, skilled personnel are also employed to run the machinery and the administration. Qualified persons should be engaged if business is to be conducted on right lines.

Reading: What Duties will make you Good Employee

Availability of Labor

Laborers are the back-bone of a business. Before starting a business the area is surveyed to know whether sufficient labor is available or not; In order to reduce the cost of production, the local rate of wages of labor is also kept in view. It is better to start business in an area where the wages are low.

Means of Transportation

Developed means of communication and transportation are essential for business. These means help to bring raw-material to the factory and also help to transport finished goods to the local and other markets. If these facilities are not available the cost of production will increase, and the business will suffer.

No comments:

We value your words. Don't spam here.

Powered by Blogger.