Entrepreneurship: How to Start and Operate a Small Business.

It is amazing how many people are eager to start a small business but have only a vague notion of what they want to do. Eventually they come up with an idea for a business and begin discussing the idea with parents, friends, and other business people. It is this stage that the entrepreneur needs a business plan. However, most entrepreneurial ventures begin as small businesses, not all small business owners are entrepreneurs.

 

What is an entrepreneurship?

Entrepreneurship is the act of accepting the risk of starting, designing, launching, running a new business and ope rationalizes it and is responsible for its success or failure.  Taking the risks of starting a business can be scary and thrilling at the same time. It normal to be scared, but if you see other people do it and they survive, you are then able to do it yourself. However, you may not have personality to assume the risks, take the initiative, create the vision, and rally others to follow your lead.

 Also read: Secrets of self - Employment

Why people take the entrepreneurial challenge? 

Some of the many reasons people are willing to take the risks of starting a business are the following:

·        Opportunity. Many people new to this country may not have the necessary skills for working in today’s complex organizations. However, they may have the initiative and drive to work the long hours demanded by entrepreneurship.

·        Profit. Profit is another important reason to become an entrepreneur. As an entrepreneur opportunity to make profit easily.

·        Independence. Many entrepreneurs simply do not enjoy working for someone else. Many doctors, for example, do not like the stress and demands of big hospital. Some have found more enjoyment and self – satisfaction in starting their own business.

·        Challenge. Some people believe that entrepreneurs are excitement junkies who flourish on taking risks.

 

What is a small business? 

A small business is defined as independently owned corporation, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts. A small business is considered small only in relation to other business in its industry. 

 

Here are the 7 steps we recommend for starting your own small business

1. Planning your business

A business plan is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualification of the owner(s). a business plan forces potential owners of small business to be quite specific about the products or services they intend to start, and cover other details of operation. 

2. Getting money to fund a small business

Entrepreneurs, like most people, often are not highly skilled at obtaining, managing, and using money. Inadequate capitalization or poor financial management can destroy a business, even when the basic idea behind the business is good and the products are accepted in the marketplace. One of the secrets of finding the money to start your business knows where to look for it.

An entrepreneur has several potential sources of capital: personal savings, relatives, former employers, banks, finance companies, and venture capitalists, government agencies such as the small Business Administrative (SBA), the Farmers Home Administrative, the Economic Development Authority, and more.

3. Writing a Business Plan

Sometimes one of the most difficult tasks in undertaking complex projects such as writing a business plan knows where to start. A good business plan takes six months to write, but you have to convince your readers in five minutes not to throw the plan away. Getting the completed business plan in the right hands is almost as important as getting the right information in the plan. 

4. Know your customers.

One of the most important elements of small business success knows the market. In business, a market consists of people with unsatisfied wants and needs who have both the resources and the willingness to buy. Once you identify your market and its needs, you must set out to fill those needs. The way to meet your customer’s needs is to offer top quality at a fair price with great service. Remember it isn’t enough to get customers – you have to keep them.

5. Managing employees 

As a business grows, it becomes impossible for an entrepreneur to oversee every detail, even if he or she is putting in 60 hours per week. This means that hiring, training, and motivating employees are critical. It is not easy to find good, qualified help when you offer less money, skimpier benefits, and less room for advancement than larger firms do. That is one reason employee relations is such an important part of small – business. 

6. Keeping records

Small business owners often say that the most important assistance they received in starting and managing the business involved accounting. A businessperson who sets up an effective accounting system early will save much grief later. Computers make record keeping 100 percent easier and enable a small – business owner to follow the progress of the business (sales, expenses, profits) on a daily basis.

7. Looking for help

Small business owners have learned, sometimes the hard way that they need outside consulting advice early in the process. This is especially true of legal, tax, and accounting advice but May also is true of marketing, finance, and other areas. Most small and medium size firms cannot afford to hire such experts as employees, so they must turn to outside assistance.

 

What causes failure of some small – Business?

o   Attempting to do too much business with too little capital.

o   Not understanding business cycles.

o   Starting with too much time it will take to build a market.

o   Going into business with little or no experience and without first learning something about it.

o   Borrowing money without planning just how and when to pay it back.

o   Plunging in without first testing the waters on a small scale.

o   Underestimating how much time it will take to build a market.

 

Wrapping up

It is important to know that most entrepreneurs don’t get the ideas for their product and services from some flash of inspiration. Rather than a flash, the source of innovation is more like a flashlight. When you decide to start your own business, you must think carefully about what kind of business you want. You are not likely to find everything you want in one business – easy entry, and reward.