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Starting a new business is the most rejuvenating thing that a person can do. One needs to be extremely cautious while setting up a business as the first move in the framing of a business can make or break it. A few wrong decisions can make such a big event of life the most drastic and disappointing one and it can lead to a complete wastage of time, money and effort. There needs to be a strategic forming of a business plan immediately after the commencement of business to make the business a success.
A "Business Plan" is a unique and proper description of what exactly the business will be like and in what manner will it be running. Such a plan is required either for providing a step by step guide for successful running of the business or in order to solicit the "financial backing for a newly formed business". The business plan also permits a business to direct the actual course or the path required to run successfully.
The first hurdle that circumscribes the business plan or model is the choosing of the right kind of business which earns in numbers. Once the type of business that is to be started is decided upon, then the actual task of business commencement starts. A newly formed business faces a lot of problems in the earlier stages of business. Some of these problems are:
I. MARKET CONDITIONS
After one has decided the type of business that is to be started, the next step that needs to be followed is to evaluate the market conditions in which the business is planning to grow. It is one of the biggest hurdle faced by those who start a new business, without considering such a significant aspect. The market in which the business plans to enter must attract the customers without much ado. Also, there must be less competitors in the market so as to make the beginning of the newly run business a big hit. At times the new entrants do not look at their competitors and plan to deal in those goods that are already being sold widely in the market at a lower price. Also, the problem of market structure must be taken into consideration while starting a business. The market must not be a monopoly as it may restrict the entry of the new businesses.
II.DEMAND FOR THE PRODUCT
The product in which the new entrant is going to deal in must be unique and different and must attract more and more people. This is because the type of product decides the demand for the same as if the product that is brought into the market is unique and catchy, it will call more people but if such a thing does not happen, a major problem stands in front of the entrant. Also, the problem of publicizing a product is seen in various new businesses. Therefore, the best marketing strategy must be adopted to avoid such a problem.
III. SIZE OF BUSINESS UNIT
The size of the business unit must also be carefully evaluated as it might create a problem in the long run. It might be possible that the product in which the new business wishes to deal in requires small capital investment and less storage space, then the size of such a business unit might be relatively small and therefore huge investment and big infrastructure might not be a necessity. On the contrary, there are times when the size of a business unit might be kept small, which might lead to several problems as the it may not serve the prerequisites of the new business.
IV. PROVISION OF CAPITAL AND LOCATIONAL FACTORS
The funding of the new business and its resources must be done in the right manner and by calculating and working out the best option of financial resources. The capital provision source must be strong enough and must be according to the budget of the new business. Also, the financing mechanism must be ready in order to finance the business requirements such as infrastructural requirements, raw material requirements etc.
Also, the location factors are considered to be a major problem that occurs before starting up a new business. The
V. RAW MATERIAL AVAILABILITY
The availability of raw material can be another such problem, creating a hindrance in the path of a new business started recently. Before starting up the business, the owner must ensure that proper availability of raw material is there. This is because the lack of raw material might lead to non - order fulfillment at times, thereby, reducing the chances of the newly formed business to create a place for itself in the market. Therefore, such a problem can be solved by making it a point that proper contacts are being made from the suppliers so that if one supplier faisl to provide the raw material, there can be an alternative to that, without hindering the running of the business.
VI. SELECTION OF STAFF
There can also be a problem of recruiting the right men for the right job. This will depend on the type of the business. Some business houses require skilled staff like IT professionals whereas some require unskilled labor like in a factory. But selecting the right ones out of lakhs or may be crores is a big and a crucial task and therefore becomes one of the problems while starting a new business.
VII. OPERATIONAL PROBLEMS
There are several operational difficulties that a newly formed business faces. Such difficulties include issues like the sources of inputs and costs, the availability of facilities and equipments and the problems in managing the processes. These technical problems can hinder the initial growth of the business and can backfire. Therefore, it becomes mandatory to evaluate and work upon the sources of inputs and costs and get the best results possible and make available the best facilities and equipments possible.