Nahumy Mwangangi

WHAT DO YOU CONSIDER WHEN ESTABLISHING A BUSINESS? To establish a business, first come up with a plan concerning the kind of product or service to offer. An entrepreneur is a person who is innovative and creative. There are many products to offer but still, there is dire need to evaluate whether profits will be attainable. The key reason of establishing a business is to make profits. Below is a summary of key issue to dig on when establishing a business. 1) What is the capital requirement? A successful entrepreneur comes up with the source of funds. A business cannot operate without funds. The capital requirement is what should come first. The business needs stock and other materials. If there are no funds, how will the business operate? Capital is a key requirement in a business. What are the different sources of funds? Review the many ways of funding your business and come up with the best. You may consider borrowing from family members or even friends. Are you trust worth? Ensure you approach people whom you win trust. In some cases, the funds may exceed the family and friends ability. If it is so, go for a business loan. First ask yourself, what will act as my security in the case of the business failure? Business failure may not occur, but death may occur as it is unpredictable or other issues. Ensure you have a solid security for recovery of the loan. Financial institutions require assets to act as security. 2) Where do I locate the business? The location of the business determines the success or failure of the business. Do I establish a business where there is high demand while the competition is high? Or do I establish the business where the demand is low and no competition? Actually, it is advisable to first lay down the strategies taking in to account the factors that influence the business operation. Establishing a business in high competitive environment has its own advantages and disadvantages. Be a risk taker. Come up with ways, which will enable you attract customers. As a fact, a new business offers its products at a slightly lower price to capture customers. 3) Is there enough space? A spacious business will accommodate many customers. Establish the business in a quiet and conducive environment. To establish a supermarket, consider a place where there is a parking lot. If a customer has a car, he or she rather shop where there is a humble space to cater for the parking. Squeezing the products leads to damage and brokerage. Ensure all products are well spaced. 4) What are my sources of supply? A successful business comes up with a reliable source of products. A customer is always after satisfaction. If the customer does not get the product due to stock outs, you will end up losing them to the competitors. The main aim is to retain the existing customers and attracting more from the competitors. Establish good relations and plans with the suppliers to curb stock outs. Communicate with the suppliers for timely delivery. 5) What’s of the prices? Essentially, a newly established business needs to come up with the pricing strategy. Bearing in mind that you are entering a competitive industry, try to offer your products at a slightly lower prices than the existing prices. This helps in creating a gap between your business and the competitors. Due to the low prices, the sales will be high resulting to high-profits. In conclusion, To establish a new business in the midst of other businesses with high market share, be ready to take risks. Selling your products at a lower price has a negative impact of reducing the sales. The advantage of selling at lower prices is that the chances of attracting more customers are high.