Posts Tagged ‘planning’

Choosing the Right Form of Your New Business

As we know that the global economic condition recently has made many companies cut the number of the employees and this makes many people become unemployed. To be able to have income, they need to work and make their own business is the right answer.

Deciding the type of the business is the first thing that you should do before you make further business planning. As we know there is several business types like sole proprietorship, partnership, limited liability company. Sole proprietorship is when the business sis made by only one person. All the capital also comes from that person. This person is responsible for all the profit and the loss of the business.

Partnership is when the company is made by two up to four people. In this type of company the capital is come from those four people and they have the same portion of capital or different. The distribution of profit and loss is based on the proportion of the capital. While limited liability company is a bigger company that the ownership is represented by shares. It can be open or close company. open means the shares are traded open in the stock market while closed means that the shares is traded only between one group of people. 

Feasibility Analysis Elements

In order to establish a business an entrepreneur needs to make a business plan to increase the chance of the business to run smoothly and not as a guarantee that the business will success because there might some things that run not according to the plan. There are many things included in the business plan include the forecasted income and expenses. But before you make business planning you need to conduct the feasibility analysis to gather the information needed in business planning.

Feasibility analysis is not the same as business planning because its serves as a filter of the ideas related to the business and also as the tool to investigate the business idea. There are three elements in feasibility analysis, they are industry and market feasibility, product or service feasibility and also financial feasibility.

The first element focuses on determining the attractiveness of an industry of a new business and identifying a possible niche in the industry that a small company can occupy. The second element is about determining what value of the proposed product or service that will attract the customers. The last element is focus on the required capital, estimated earnings and the ROI or return on investment.

What is Business Planning?

When we want to establish a business, there are many things that should be done until finally you start to serve the customer. Start with the feasibility analysis that will filter all the ideas related to the proposed business and business planning. Business planning is one of the important factors that will increase the possibility of the business runs smoothly in the future, so it’s not a guarantee for a business to success.

Business planning is done after the feasibility analysis because the information gathered in feasibility analysis is used in business planning. Business planning is basically a summary from the business owner of the detail of the proposed business, the marketing strategy used in the business and also the financial planning.

Business planning has three important functions. First is to guide the company because business planning contains the future planning or future course of the company and the strategy of how to achieve it. second is to attract the investor and creditor who will give additional capital to the company and the third is to show that the entrepreneur understand about the business, the state of the business on the future and how to achieve it and also what key factors that will make the business success.

The Right Strategy of Small Business Planning

There are some vital key components of small business planning you need to prepare beforehand. These components will affect whether your business will progress or not. They are: vision setting up, planned marketing, effective and efficient operations, financial plan and many more. Those components are integrated each other, one is not more important than another. Thereby, make sure to prepare all things correspond to your business goal.

One thing you should not ignore is about implementation and follows through. What does it mean? The operations of your business should link to what you have arranged beforehand. There will be some challenges like failed products, consumer complaints and other. Each challenge you are faced with should be solved for a way out. A small business usually has little department, through which company’s objectives are endeavored to achieve. Despite small business planning is not as complicated as big business, both of them still have the same objective: to achieve maximum profit.

Not to forget, making a research on each aspect of small business planning is a must when you want to have significant market share of your product or service. By doing research, everything you need can be seen so that you can determine the right business strategy.