Overview of Running a Business

Introduction

• Starting a business begins with an idea and the entrepreneurial spirit akin to Zahara Jones.

• Business ownership can be:

  • Challenging

  • Rewarding and stimulating

  • Demands planning and understanding of customers and competition

• The achievement and satisfaction from success outweigh the efforts required.

Learning Outcomes

• Investigate entrepreneurial attributes for business success.

• Examine considerations in planning and running a business.

• Investigate key issues and processes related to business management.

Being an Entrepreneur

• Entrepreneurs identify opportunities through innovation, driven by profit motivation and desire for independence.

• Critical questions for prospective owners:

  • "Why do I want to start a business?"

• Analysis of personal attributes is essential as business success largely depends on the owner's qualities.

Advantages and Disadvantages of Self-Employment

• Advantages:

  • Independence

  • Profit potential

  • Personal satisfaction

  • Opportunity to contribute to society

• Disadvantages:

  • Long hours and hard work

  • Uncertain income and risk of failure

  • Responsibility for decision-making

Entrepreneurial Characteristics

• Entrepreneurs exhibit qualities such as:

  • Vision and ability to seize opportunities

  • Initiative, innovation, and resilience

• Case studies of successful entrepreneurs like Bill Gates and Kath Fry highlight various pathways to success.

Identifying Business Opportunities

• Opportunities arise from market needs and gaps,

• Creatively addressing needs with goods or services can lead to successful businesses.

• Sources for business opportunities:

  • Market research, customer needs, and competitor analysis.

Planning and Organizing a Small Business

• Market Research: Analyzing consumer behavior and competition.

• Location: Choosing the right physical or online presence is crucial for success.

• Demographics: Understanding customer characteristics helps tailor products and services.

• Competition: Recognizing and adapting to competitors to maintain market share.

Financing a Business

• Two main sources of finance:

  • Debt (loans from banks, financial institutions)

  • Equity (funds from owners or shareholders)

Preparing for a Loan Application

• Assess ability to repay

• Determine the type of loan suitable (secured vs unsecured)

• Review credit rating and financial history.

Business Structures

• Legal structures include:

  • Sole Trader

  • Partnership

  • Private Company

  • Public Company

  • Incorporated Association

• Each structure has its pros and cons regarding liability, decision-making, and taxation.

Managing and Operating a Business

• Key areas of management:

  • Operations: efficient use of resources

  • Marketing: targeted promotions based on market research

  • Financial: accurate record-keeping and financial management

  • Human Resources: effective recruitment, training, and motivation of staff.

Impacts of Economic Conditions

• The economic cycle influences business performance:

  • Peaks: High sales, full employment

  • Troughs: Reduced sales, increased unemployment

• Businesses respond to economic changes by adjusting staffing, production, and pricing strategies.

Importance of Ethical Practices

• Corporate social responsibility (CSR): businesses must consider their impacts on society and the environment.

• Ethical decision-making enhances reputation and employee morale, contributing to overall performance.

Conclusion

• Success in business requires understanding complex aspects from initial planning to operations.

• Recognizing the significance of market research, ethical practices, and ongoing financial management is paramount in achieving business objectives.