Establishing A Business, Business Plan, Primary & Secondary Research, Regulatory Practice

Entrepreneurship

Entrepreneur

Someone who shows vision and creativity, and who takes risks by creating business ventures.

Entrepreneurship

Process of identifying, creating, and managing innovative ventures, driven by individuals who take calculated risks to bring about positive change and financial success.

Enterprise

A business that has been created by aspiring individuals. The term “enterprising" refers to being willing to try new challenges and to take acceptable risks.

FUNCTIONS OF AN ENTREPRENEUR

• Conceptualising - the development of a new business idea

• Planning - setting goals and planning to achieve them; creating a business plan

• Accessing Funds - acquiring funds for the business; they can access funds through loans on credit

• Operating the Business - ensuring that day-to-day business plans are carried out

• Evaluating Performance - determining how the business is going

• Organising to Business - keeping records, proper documentation, hiring staff and acquiring

  resources

WHY AN INDIVIDUAL MAY WANT TO ESTABLISH A BUSINESS

Financial Independence -

When you operate your own business, you are not dependent on anyone else for wages or salary, you also have autonomy over the profit earned by the business

Self-fulfillment

This refers to doing something that makes you happy and allows you to pursue your passions and interests, leading to a more satisfying and meaningful life.

Self-Actualization

This goes beyond self-fulfillment, it is defined as a personal state of doing something that meets the highest level of human needs

Increased Income

Entrepreneurs will relatively make more income than a person that works for another person

CHARACTERISTICS OF A TYPICAL ENTREPRENEUR

• Creative - the ability to come up with new ideas and to find solutions to problems

• Innovative - The ability to identify new methods and ways of doing things and to develop a new idea

• Flexible - The ability to react quickly to changes

• Goal Oriented - Being driven to achieve results and having clear targets in mind

• Persistent - The ability to keep trying and to be determined and confident

• Persevering - The ability to work hard over long periods

• Risk Taker - Being willing to take sensible risks even though there is a chance of failure

ROLES OF AN ENTREPRENEUR IN ECONOMIC DEVELOPMENT

• Collaborating- Entrepreneurs collaborate with other businesses, including suppliers and government entities, to contribute to a vibrant economy.

• Providing Goods and Services- Enterprises supply goods and services that satisfy the needs and wants of the citizens

• Creating Jobs - Entrepreneurs collaborate with other businesses, including suppliers and government entities, to contribute to a vibrant economy

• Contributing to Nation Building - Businesses aid nation-building by paying taxes, funding social services, and maintaining infrastructure through sales and profits.

ROLES OF ENTREPRENEURS IN THE DECISION-MAKING PROCESS

• Conceptualizing - Whether to go ahead with the business idea. Deciding which idea

  will be most successful.

• Planning- Where to produce the product, how to produce it, what size the enterprise should be, how to market and sell the product, and many other planning decisions.

• Accessing Finances - How to raise finance, from whom to borrow, and how much

  finance needs to be raised.

• Organizing Factors Of Production - Which factors of production to use, how to combine different factors, and the composition of these factors

• Evaluating - How to analyse the enterprise, and what criteria will be used to judge business success.

• Risk Bearing - Deciding how much risk to take and determining which risks

  are acceptable.

• Operating The Business - Everyday decisions about running the business. Who will manage the business?

STEPS TO ESTABLISH A BUSINESS

1. Conceptualizing (the idea of the business, with details such as what the business will look like initially)

2. Research (market research needs to be done to identify potential customers and what they want)

3. Identification of resources ( this includes financial, human and material)

4. Creation of a business plan

5. Acquisition of funds

6. Operation of the business

Business Plan

WHAT IS A BUSINESS PLAN

• A business plan is a document that details a company's goals and how it intends to achieve them. They are of benefit to both startups and well-established companies.

REASON FOR A BUSINESS PLAN

1. To research the business idea

2. To attract potential investors

3. To source financing

4. To guide decision making

THE IMPORTANCE OF A BUSINESS PLAN

A good business plan guides you through each stage of starting and managing your business. It's a way to think through and detail all the key elements of how your business will run.

ELEMENTS OF A BUSINESS PLAN

• Executive Summary - The business plan should begin with a brief summary of the rest of the plan, enabling the reader to get a view of the business its owners, the market, the proposed

  financing, proposed products and any plans for future growth

• Operational Plan - This shows how the business will be organized and run. It includes the name, address and legal structure of the business. It describes the business’s aims and objectives give an overview of the personnel

• Business Opportunity -This is a description of the product or service. It may include sketches and photographs, as well as a clear description of the product or service and its key features.

• Marketing Plan -This should clarify who the potential customers are and how many of them might be.

• Financial Forecast - The financial forecast identifies where the funds to set up and operate the business will come from. This will be followed by details of proposed sales numbers and sales revenues.

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Research and Sources of Information

PRIMARY RESEARCH

Primary research involves the collection of original and firsthand data directly from the source.

EX.

• Surveys - surveys involve collecting data from a sample of individuals through structured questionnaires

• Interviews - interviews involve direct one-on-one interactions between two parties where questions are asked to gather information

• Photographs -

• Artefacts and Objects

• Original Documents

SECONDARY RESEARCH

Secondary research involves the use of existing data that has already been collected by someone else for a different purpose

EX.

• Books

• Articles

• Documentaries

• Biographies

Feasibility Study

FEASIBILITY STUDY

A feasibility study is a piece of research to find out whether a business or project will work.

SIGNIFICANCES OF A FEASIBILITY STUDY

• To ascertain the viability

• To be aware of the possible costs attached to the project, and

• For possible sources of finance.

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Regulatory Practices & Policies

Level of Government Rule Making

• Local Rules - Made by local government, for example, the government of Jamaica.

• Regional Rules - Made by the regional government’s decision-making body. For example, CARICOM

• Global Rules - Made by groups of governments working together

Local Government Regulations

• Municipal Rules - The municipal council creates municipal rules in a large urban area. These are specific to a particular city or county, and the government bodies within those cities or counties.

• Village Rules - Village councils are responsible for making the decisions necessary for the operation of their community.

• Parish Rules - Parish councils are the local authority that makes decisions on behalf of the people in the parish.

Monetary Policies

• The monetary policy involves the management of interest rates and the total supply of money in circulation in a business

Fiscal Policy

• Fiscal policy is a collective term used for the taxing and spending actions done by the government to influence aggregate demand in the economy

Consumer Protection Agencies

• These agencies stop unfair and fraudulent business practices by collecting complaints and doing investigations

Environmental Policies

• They are policies made to regulate resource pollution and to protect both humans and the environment

Intergovernmental Agreements

• Any agreement that is made between two or more governments in cooperation to solve problems of mutual concern.

Factors That Determine the Location of the Business

Geography

• The natural features, population and the already existent industries dictate whether a location is good for a business

Availability and Location of Raw Materials

• Businesses that use heavy, bulky materials that are expensive to transport are usually located near their source

Infrastructure

• Businesses look at the physical and organizational facilities and structures needed to operate the business

Power and Water Supply

Telecommunications

• It is important that businesses set up in areas where communication is clear and reliable

Health Facilities

• Healthcare facilities that are near the business are important especially if the industry is more likely to have accidents

Supply of Labour

• Businesses set up in areas where there will be a need for employment and with skilled labour

Collateral

Collateral is an asset that a borrower provides as security in order to secure a loan from a lender

TYPES OF COLLATERAL

• Property

• Money

• Bonds

• Stocks

• Cash return of Life Insurance

• Motor Vehicles

• Appliances