Starting a Business


An entrepreneur is defined as someone who has the ability to
take risks and
organise the factors of production.

When starting a new business the entrepreneur faces a
number of problems before they can start up.

They need an idea and a will to succeed, but these are not
enough on their own to be successful.

A business needs:

Finance – to fund the other elements listed below: finance is
usually the hardest thing to obtain in a start-up business.

Labour – to help develop a product or service and then to
produce/deliver it.

Customers – without them, the business will fail. Obtaining
customers means the business must undertake marketing.

Suppliers – provide many of the “inputs”, such as raw

Premises and equipment – maybe a simple office, or
possibly a large, modern factory; depending on what the
business activity is.

Management organisation & structure – this is often very
simple at the start-up stage (e.g. a sole trader!).

Designed, researched and tested product or service – a
successful business is about more than just having a good
idea – the product needs to be brought to the marketplace in
its best format.

An entrepreneur needs several skills to succeed:
Ability to take risks
Ability to persuade others to join the business or lend the
business money
Energy to keep the business going under tough
circumstances – it is often said that the best entrepreneurs
are the most persistent