question_answer 11)

Describe briefly the steps involved in starting a new business.

Answer:

Setting up and running of business unit is a very crucial decision which is taken by an entrepreneur. He performs several functions like assembling inputs, -market analysis, sales strategy, risk factors, financial analysis and many more. But in order to start a new business following steps are to be taken (i) Scanning the Environment The complete awareness and understanding of business environment is known as Environment scanning. An entrepreneur scan business opportunities and risks involved. After the analysis, he use these opportunities and market them in much better way. (ii) Development of Product It is second step after scanning the environment an entrepreneur starts assessing scarce resources, assembling inputs and starts the production of goods and services. (iii) Feasibility Analysis It refers to the analysis which helps in knowing the practical possibility. An entrepreneur starts looking the feasibility like technical feasibility helps in knowing that the idea should be converted into reality using available technology, similarly economic feasibility helps in knowing the cost involved in production and after selling it will earn profit or not. The business plan starts after the feasibility report. (iv) Funding Agencies Finance is the back bone for the business activity. An entrepreneur needs finance to carry on the business that's why they prepare business plan which is to be submitted before the financial institutions and if they satisfy they fund the project. (v) Establishing of an Enterprise After getting the fund, an entrepreneur have to take legal permission and clearance from various agencies in order to establish an enterprise.