The following are he steps involved in setting up a new business.
(i) Scanning for Opportunities: The first step involved in starting up a business is to look out for various business opportunities. For scanning the opportunities an entrepreneur uses his personal observations, contacts, official reports, published documents, surveys, etc. He carefully analyses each opportunity and works out how he can use them to create goods and services. He analyse the situations based on several factors such as market size, where to procure goods from, at what price to sell, probable competitors, etc. Opportunities are scanned not only at the domestic/national front but also at the international front.
(ii) Deciding on the Product/Idea: Scanning of opportunities helps in identifying the broad segment or market for the business. The next step is to zero in on a particular product or service in the selected market segment. For instance, suppose an entrepreneur decides to set up a venture in the fast food market. He must decide the products or combination of products that he would supply.
(iii) Analysis of Feasibility: Once the product or service is chosen it becomes important for the entrepreneur to check whether the idea is practically possible or not. The entrepreneur needs to find this out, on the basis of different parameters such as whether the technology to be used is available, whether the product will derive profits, is the idea financially feasible and whether the good will face any legal restrictions.
(iv) Appraisal by Funding Agencies: To set up the business, an entrepreneur requires funds. For receiving the required funds, the entrepreneur discusses the business plan and the feasibility reports with the financial agencies. The financial institutions provide the funds only when they are convinced about the plan and its feasibility. Sometimes the financial institutions require the entrepreneur to fill a performa detailing about the plan.
(v) Resource Mobilisation: After the appraisal is received from funding institutions, the entrepreneur starts identifying and collecting the resources that are needed for the commencement of the project. The resources required comprise of raw materials, technology, human resources, machines, etc. The entrepreneur tries to obtain the resources at the minimum possible cost.
(vi) Project Launch: Next, the entrepreneur proceeds with the commencement of the project. That is, he undertakes activities such as establishing the factory premises, purchasing equipments, collecting the inputs for production, etc. Thereby, he establishes the enterprise.
(vii) Adoption and Management of Growth: The role of an entrepreneur do not ends with the establishment of enterprise. He performs various other day-to-day functions such as organising goods and services, ensuring production, keeping an eye on competition etc. Thus, he needs to manage the business and continuously strive for better growth and development.
