Entrepreneurs will usually start their business venture with a new idea or they will adapt an idea that already exists and try to improve on it. To set up a business, entrepreneurs have to work through the following steps:
1. Researching the need for the product or service
It is important to carry out market research to ensure the product or service is going to be a success. Primary research from questionnaires, interviews, focus groups and secondary research from databases, internet searches are two different types of research that can be carried out.
2. Funding options for the business
In order to start up, businesses are funded by different sources of finance. Successful entrepreneurs use a combination of finances to spread the potential financial risk. Some sources of finance include:
- personal savings
- sale of an asset (house/car)
- overdraft
- bank loan
- credit cards
- investors
- redundancy payment
- government assistance
3. Providing the product or service
It is important for the entrepreneur to ensure the raw materials are readily available to provide the product or service. If the product is in huge demand then, it is more likely that goods can be mass produced to meet the demand.
4. Marketing and promoting the product or service
To make the business successful, the product or service must be marketed appropriately to ensure continued demand and a successful business. There are 4Ps that need to be carried out to ensure successful marketing of a product or service. They are:
Product - designed to meet customer needs
Placement - deciding where to see the product/service so that it is accessible to everyone
Price - that should be competitive to attract customers but still make a profit for the business
Promotion - to inform/persuade customers in the best way possible
5. Placing the product
This means getting the product/service to the place where they are going to sell most successfully. The business must consider the most appropriate:
sales outlets for the product
channel of distribution to use
method of transport for the product
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