Establishing a business

• An entrepreneur is a person who identifies successful business opportunities, risks, time, and money to start and operate a business
• Entrepreneurs bring together resources with the intention of making a profit
• Entrepreneurship is the process of identifying successful business opportunities, risks, time, and money to start a business, bringing the resources together to make a profit
• Potential functions of an entrepreneur include:

  • Conceptualizing
  • Planning
  • Risk Management
  • Innovating
  • Operating
  • Accessing funds
  • Networking
  • Marketing & Sales
  • Evaluating Business Performance
  • Organizing
  • Legal Compliance
  • Social Responsibility
• Key functions of an entrepreneur:

  • Conceptualizing: Forming a new business idea
  • Planning: Setting goals, creating a business plan
  • Accessing Funds: Acquiring funds for the business through loans or credit
  • Operating the business: Ensuring day-to-day activities are carried out
  • Evaluating business performance: Determining how the business is doing
  • Organizing the business: Keeping records, proper documentation, hiring staff, acquiring resources
• Characteristics of a successful entrepreneur:

  • Creative: Ability to develop ideas
  • Innovative: Developing new ideas or making changes to existing ones
  • flexible: Ability to react quickly to changes due to economic changes
  • Goal-oriented: Seeks a higher need for achievement
  • Persistent: Determined and confident
  • Persevering: Ability to work hard over long periods
  • Risk-taker: Likes challenges, confident in their success
• The first step is to identify the type of business that will be established.
• A sole proprietorship is owned by one person, while a partnership involves two or more people sharing ownership.
• Corporations are separate legal entities from their owners, providing limited liability protection.
• A sole proprietorship is owned by one person who has complete control over all aspects of the business.
• Partnership involves two or more people sharing ownership and profits/losses equally.
• A corporation is a legal entity separate from its owners, with limited liability protection.
• Franchising allows individuals to purchase rights to use another company's brand name, products, services, and marketing methods.
• Cooperatives involve members pooling resources to achieve common objectives.
• Limited Liability Companies (LLCs) combine elements of corporations and partnerships, with personal assets protected but profits taxed as individual income.
• Advantages of an LLC include personal asset protection, pass-through taxation, flexibility in management structure, and ease of formation.
• Advantages include simplicity, ease of formation, no formalities required, and full control over decisions.
• Disadvantages of an LLC include self-employment taxes on net income, potential loss of credibility with customers, and increased complexity compared to other forms of businesses.
• The type of business structure chosen will depend on factors such as the number of owners, desired level of liability protection, and ease of management.
• Nonprofit organizations aim to serve a social purpose rather than generate profit for shareholders.
• The advantages of sole proprietorship include simplicity, ease of operation, complete control over decisions, and no need to share profits.
• Executive Summary:

  • Brief summary of the business plan details
  • Provides a snapshot view of the business, owners, market, proposed financing, products, and future growth plans
  • Usually written last
• Operational Plan:

  • Shows how the business will be organized and run
  • Includes business name, address, legal structure
  • Describes business aims, objectives, personnel overview, proposed suppliers, and equipment needed
• Financial forecast:

  • Identifies the source of funds for setting up and operating the business
  • Details proposed sales numbers and revenues
  • Outlines key costs of the business