ENTREPRENEURSHIP

CHAPTER 1: INTRODUCTION AND BACKGROUND CONCEPTS

OF THE COURSE

Introduction
The human being and animals have needs through which they live their
lives. As concerns man or the human being, there exists many needs and
wants, examples include dresses, foods, medications, cars, household items,
other travelling means, construction materials and so on. As for animals, they
need food, medications and others. These needs cannot be met by no other
means but through enterprises. These enterprises are created in order to produce
the needs needed by man an animals. These enterprises are created by people
who have the vision of meeting the needs of human beings and animals.
Besides these needs man has also other needs and so many types of enterprises
are created to meet these needs, we have financial enterprises such as banks and
credit unions. These enterprises are created because man cannot function
without money and man cannot keep money at home for fear of thieves, the
need to earn interest on the money and the need to borrow money from these
enterprises.
There also exist the need for education thereby giving rise to the creation
of educational establishments.
1. Economic Activities
Economic activities are related to production, distribution, exchange and
consumption of goods and services.
The primary aim of the economic activity is the production of goods and
services with a view to make them available to consumer. Economic activity is
based on the fight against scarcity.
"Human activities which are performed in exchange for money or
money's worth are called economic activities."

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In other words, economic activities are those efforts which are undertaken
by man to earn Income, Money, Wealth for his life and to secure maximum
satisfaction of wants with limited and scarce means. E.g. A worker works in a
factory and gets wages.
2. Employment
Employment is a type of occupation under which one person provides his
services, physical or mental to someone else in return for which he gets salary
or wage. The person who employs is called employer and the person who is
employed is called employee or worker.
3. Business
Business is an economic activity concerned with production and
distribution of goods and services with the aim to earn profit. It includes all
those activities which are directly or indirectly concerned with production,
purchase and sale of goods and services. So the production, marketing,
advertising, warehousing, insurance, banking, etc. are all business activities.
Human beings are continuously engaged in some activity or other in
order to satisfy their unlimited wants. Every day we come across the word
'business' or 'businessman' directly or indirectly. Business has become essential
part of modern world.
Business is an economic activity, which is related with continuous and
regular production and distribution of goods and services for satisfying human
wants.
All of us need food, clothing and shelter. We also have many other
household requirements to be satisfied in our daily lives. We met these
requirements from the shopkeeper. The shopkeeper gets from wholesaler. The
wholesaler gets from manufacturers. The shopkeeper, the wholesaler, the
manufacturer are doing business and therefore they are called as Businessman.

3.1. Definitions of Business by some authors

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Stephenson defines business as, "The regular production or purchase and sale
of goods undertaken with an objective of earning profit and acquiring wealth
through the satisfaction of human wants."
According to Dicksee, "Business refers to a form of activity conducted with an
objective of earning profits for the benefit of those on whose behalf the activity
is conducted."
Lewis Henry defines business as, "Human activity directed towards producing
or acquiring wealth through buying and selling of goods."
Thus, the term business means continuous production and distribution of goods
and services with the aim of earning profits under uncertain market conditions.
3.2. Features of Business
Characteristics or features of business are discussed in following points :-
 Exchange of goods and services
 All business activities are directly or indirectly concerned with the
exchange of goods or services for money or money's worth.
 Deals in numerous transactions
 In business, the exchange of goods and services is a regular feature. A
businessman regularly deals in a number of transactions and not just one
or two transactions.
 Profit is the main Objective
 The business is carried on with the intention of earning a profit. The
profit is a reward for the services of a businessman.
 Business skills for economic success
 Anyone cannot run a business. To be a good businessman, one needs to
have good business qualities and skills. A businessman needs experience
and skill to run a business.
 Risks and Uncertainties

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 Business is subject to risks and uncertainties. Some risks, such as risks of
loss due to fire and theft can be insured. There are also uncertainties, such
as loss due to change in demand or fall in price cannot be insured and
must be borne by the businessman.

 Buyer and Seller

 Every business transaction has minimum two parties that is a buyer and a
seller. Business is nothing but a contract or an agreement between buyer
and seller.

 Connected with production

 Business activity may be connected with production of goods or services.
In this case, it is called as industrial activity. The industry may be primary
or secondary.
 Marketing and Distribution of goods
 Business activity may be concerned with marketing or distribution of
goods in which case it is called as commercial activity.

 Deals in goods and services

In business there has to be dealings in goods and service.
Goods may be divided into following two categories :-
 Consumer goods : Goods which are used by final consumer for
consumption are called consumer goods e.g. T.V., Soaps, etc.
 Producer goods : Goods used by producer for further production are
called producers goods e.g. Machinery, equipments, etc. Services are
intangible but can be exchanged for value like providing transport,
warehousing and insurance services, etc.

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 To Satisfy human wants
The businessman also desires to satisfy human wants through conduct
of business. By producing and supplying various commodities,
businessmen try to promote consumer's satisfaction.
 Social obligations
Modern business is service oriented. Modern businessmen are
conscious of their social responsibility. Today's business is service-
oriented rather than profit-oriented.

The notion of enterprises or companies

This can be determined through the classification according to size
The size of a business can be measured using several criteria, the most
important of which are:
 The number of employees;
 Equity;
 Turnover ;
 Market share ;
 Added value ;
 The result of the financial year

From the above criteria, we distinguish:

 Very small enterprises or businesses;

 Small enterprises or businesses;
 Small and medium enterprises;
 The big enterprises.
The first, that is very small businesses or enterprises is reduced to a
human scale, that is to say that very generally in this type of business, the owner

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ensures its management (the shops in the neighbourhood, the perfumeries and
others)
The first three categories belong to small and medium-sized enterprises
(SMEs). We will therefore distinguish small and medium-sized enterprises or
businesses from large enterprises or businesses

SMALL AND MEDIUM-SIZED ENTERPRISES (SMES)

This include small and medium-sized businesses, craft businesses, small
and medium-sized enterprises.
Small and medium-sized enterprises: This is characterised by the fact that:
 They carry out purchases from wholesale commercial intermediaries or
central purchasing offices;
 There is close contact between the owner and the clientele whom he/she
knows and consults;
 They generally retail the goods
2 - Big business
The large enterprises are characterised by:
 production that takes place in large quantities;
 The rationalization of production which is pushed (division of labour,
etc.) so as to reduce cost prices;
 The contribution of considerable investments;
 Exporting production through foreign importers and setting up
distribution subsidiaries abroad

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THEORIES OF ENTREPRENEURSHIP
We have already studied that the entrepreneurship development depends
upon various factors. Various theories or models have been prepared for this
purpose. Various thinkers have propounded various theories of entrepreneurship
development or development models of entrepreneurial class.
The supply and motivation of entrepreneurship are affected by various
factors.
Different Theories of Entrepreneurship
Following are the different theories of entrepreneurship:
I - INNOVATION THEORY
Joseph A. Schumpeter is the propounder of innovation theory. The
assumptions are:
1. The entrepreneur is born with the desire to establish his own industry, also
2. He desires to do something new.
3. Takes pleasure of creativity and earning experiences of skills for doing
various tasks.
However, the main objective behind the arms is to earn profits, by way of
search of new raw materials, new sources, new machinery, production of new
products, new methods of production, new workers and providing consumer
satisfaction.
II - THEORY OF NEED OF ACHIEVEMENT
The need for achievement theory was propounded by McClelland. His
assumption is that the Desire of high achievements obtaining specific
achievements, making the best performance, touching the heights of excellence,
developed Entrepreneurial tendencies in the individuals.
But, for that, the entrepreneur should have adequate capacity of
imaginations, thinking and developing new combinations.

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For that, the feelings for achievements are inculcated in him, from the
very beginning and thereafter it is especially attempted that he may become a
successful entrepreneur.
McClelland has recognized the desire to achieve the major factor in
entrepreneurship development.
He has suggested conducting motivational training programmes for
development of the entrepreneurs.
III - THEORY OF RECOVER THE WITHDRAWAL OF STATUS
This theory was propounded by Everet Hegen. His assumption is that
creativity of any suffering minority group in the society is the main source
of entrepreneurship.
In this regard, he is of the opinion that if any community has to lose its
reputation, due to some reasons, that group becomes quite active and strong to
regain it.
As a result, many entrepreneurs are born. Hence it may be said that
withdrawal of status of any social group is the root cause of its personality
development and Entrepreneurial development also.
According to Hagen, withdrawal of status or reputation is caused by the
following conditions:
1. When a reputed group is forcefully displaced by another group.
2. When a better group changes its views about its subordinate group.
3. When a group starts living in some new society. The persons or the group
tend to do creativity behavior to regain the status and reputation, after
withdrawal of status, etc. Which will result in entrepreneurship
development?
IV - BEHAVIOUR THEORY
This theory was propounded by John Kunkel. He assumes that the
entrepreneurial development of any society depends upon its past and exiting
economic social aspirations.

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He feels that following four types of compositions are essential for
entrepreneurial development:
 The behaviour of the individuals may be made entrepreneurial by
influencing the major factors of demand composition.
 The behaviour of the individual may be made Entrepreneurial by
influencing the major factors of demand composition.
 Opportunity competition is decided by various factors, like labour and
labour market, production methods, training opportunities, skills, etc.
 Labour composition is operated by various factors, like sources of
livelihood, traditional approach, and aspirations of life, etc.
Hence, it may be said that the supply and development of the
Entrepreneurs depend upon aforesaid composition methods, assumptions, and
their scope.
Hence, The Entrepreneurship depends upon the particular combination of
circumstances, whose creation is difficult, but their destruction is easy.
In aforesaid physiological theories of entrepreneurship
development, Thomes Beagle and David P. Bayad have stated five dimensions
of entrepreneurial development:
1. Need for high achievement.
2. The Entrepreneur is controlled by self, rather than by luck.
3. The entrepreneur always remains ready to take the risk in anticipation of
returns and assets.
4. The entrepreneur also remains ready to take the uncertainties and
ambiguities, because he knows that the work which is done for the first
time involves some uncertainties and ambiguities.
5. The behavior of the Entrepreneur may include making hurry in almost all
activities and feeling the pressure of time and sometimes
getting hyperactive and aggressive.

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V - ENTREPRENEURIAL GROUP THEORY
This theory was propounded by Frank W. Young. The theory is based
on the assumption that expansion of entrepreneurial activities is possible only
by entrepreneurial groups.
Because they have specialties is in the groups, and capacity to react.
However, this reactiveness is possible, when three conditions prevail
simultaneously in society.
 When the group feels of low status.
 When the group is not successful in reaching to important social
machinery.
 When the group has better institutional resources as compared to other
groups.
Thus, it is evident that when any subgroup in a big society realizes low
status and position, then its capacity to react gives birth to Entrepreneurial
behavior.
VI - SOCIAL CHANGE THEORY
This theory of entrepreneurship development has been propounded
by Max Weber.
For the first time, he stated that the emergence and development of the
entrepreneurs depend upon ethical values system of society.
He is of the view that religion in which a person survives and the religious
values and faiths which he accepts, substantially affect his business life,
occupation, Entrepreneurial enthusiasm, and energy.
He had linked entrepreneurship development with protein (that sect of
Christianity who does not accept the total authority of pope) and with various
religious communities.
His observes that those religious communities which lay emphasis
on capitalism, materialism, and currency rationalization have been successful in

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the emergence of entrepreneurs, wealth, technology, capital formation,
and economic development.
It is evident that the Protestant society has been able to achieve rapid
economic progress.
VII - CULTURAL THEORY
This theory of entrepreneurial development was propounded by B.F.
Hauslin.
He is of view that industrial entrepreneurial development is possible only that
society, where social procedures are unstable, alternatives of employment to
persons are widely available and the society which encourages personality
development of enterprising persons.
He explained that the culturally marginal groups have special importance
in encouraging economic development of any Nation, the reason being that the
marginal individuals are more capable of Creative adjustments of the conditions
of the circumstances and during the process of this adjustment they make efforts
to bring about real innovation social behavior.
In addition, he also laid the stress of developing individual qualities for
entrepreneurial development.

VIII - CULTURAL VALUE THEORY

Cultural value theory has developed by Kroken. He emphasized cultural
values, expected rules, and social approvals have specific importance in
entrepreneur development.
So, the Entrepreneur is an ideal personality for The society.
In addition, Kroken also explained that the success of the entrepreneur
and his performance are influenced by the following 3 factors:
1. Entrepreneurs own inclination towards his work and profession.
2. Expectations of acceptance groups regarding the role of the entrepreneur.
3. Functional requirements of the work.

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Thus, it may be said the Entrepreneurial development is significantly
linked with the environment.
IX - SOCIO-CULTURAL VALUE THEORY
This theory of entrepreneurship development was propounded by Stokes.
He is of the view that during the period of economic transition, socio-cultural
values play a very important role.
The physiological factors encourage economic development by
stimulating entrepreneurship.
According to him, ‘Mental thinking’ do create the directions of
entrepreneurial development, but group generated value Matrix has significant
contribution in attracting the entrepreneurship.
X - ECONOMIC THEORY
This theory has been propounded by Pepuek and Hassis.
Their assumption is that physiological motivation for economic gains or
increase in real income exists in every society.
In addition, he has also stated that economic motivations are sufficient
conditions for individual industrial entrepreneurship.
But, if in spite of that, entrepreneurial response lacks in the individuals, it
is the result of various types of market imperfections and propositions of policy
determination.
This theory is based on the assumption that entrepreneurial development
is the result of various economic motivations.
Hence, the individuals enter into the industrial field with the aim of
maximum utilization of economic opportunities available within the economy
and the market.
XI - ENTREPRENEURIAL DISPOSITION THEORY
Entrepreneurial disposition theory of entrepreneurship development has
been propounded by T.V.S. Rao.

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His assumption is courageous Entrepreneurial disposition is
very important for entrepreneurial development.
Besides, for entrepreneurial establishments, individual, physical, and
orienting factors are also essential.
According to Rao, Entrepreneurial disposition includes factors like
dynamic motivation, long-term devotion, individual, social and physical sources
and political system.
These factors influence the Entrepreneurial development and also
promote industrial activities.
XII - PROCESS OF STAGE THEORY
Within accepted theory, process or stage theory has been developed
by Venkat Rao.
His assumption is that entrepreneurship development a process of five
following stages:
(1). Simulation
In this stage, the environment is built for development of entrepreneurs,
by way of providing them various simulation.
Various policy announcements are made in the country, specific plans are
prepared for development, wide publicity is done, support institutions are
established, entrepreneurial development programmes are organized.
All these help in stimulating entrepreneurship.
(2). Identification of Entrepreneurial Abilities and Capacities in the Society
At this stage identification of entrepreneur is carried out and advanced
systems are adopted.
The entrepreneurs are directed toward constructive activities.
The prospective Entrepreneur in various fields is identified.

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(3). Development and Expansion of Entrepreneurs
At this stage, various programmes are organized for the development of
entrepreneurs, which include vocational guidance programmes, management
Training, and Technical training.
In addition, various policies and programmes are organized for the
expansion of industrial activities.
(4). Promotion
At this stage, various support organizations, like Central labour
organisations, state-level organizations, and Research, testing and Standards
organizations, etc. are established for the expansion of economic activities
and entrepreneurial promotion.
These organizations provide various types of motivation, assistance,
facilities, and services to entrepreneurs.
(5). Follow Up
At the last stage, follow-up of government programmes and policies
formulated for entrepreneurial development is undertaken.
The system of feedback is introduced for entrepreneurial expansion and
development.
Thus, now you know the various different theories of entrepreneurship.
How to Start a Business
You want to make sure you prepare thoroughly before starting a business, but
realize that things will almost certainly go awry (wrong). To run a successful
business, you must adapt to changing situations.
 Conducting in-depth market research on your field and the demographics of
your potential clientele is an important part of crafting a business plan. This
involves running surveys, holding focus groups, and researching SEO and
public data.

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 Before you start selling your product or service, you need to build up your
brand and get a following of people who are ready to jump when you open
your doors for business.
Talk to any entrepreneur or small business owner and you'll quickly learn that
starting a business requires a lot of work. An idea doesn't become a business
without effort.
Some budding entrepreneurs understand the effort necessary to create a
business, but they might not be familiar with the many steps required to launch
a business venture. If you're willing to put in the effort to build a business,
you're going to want to know the steps needed to reach your goals.
Tasks like naming the business and creating a logo are obvious, but what about
the less-heralded, equally important steps? Whether it's determining your
business structure or crafting a detailed marketing strategy, the workload can
quickly pile up. Rather than spinning your wheels and guessing at where to
start, follow this checklist to transform your business from a lightbulb above
your head to a real entity.

1. Refine your idea.

If you're thinking about starting a business, you likely already have an idea of
what you want to sell, or at least the market you want to enter. Do a quick
search for existing companies in your chosen industry. Learn what current brand
leaders are doing and figure out how you can do it better. If you think your
business can deliver something other companies don't (or deliver the same
thing, only faster and cheaper), you've got a solid idea and are ready to create a
business plan.
"In the words of Simon Sinek, 'always start with why,'" Glenn Gutek, CEO
of Awake Consulting and Coaching, told Business News Daily. "It is good to
know why you are launching your business. In this process, it may be wise to
differentiate between [whether] the business serves a personal why or a

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marketplace why. When your why is focused on meeting a need in the
marketplace, the scope of your business will always be larger than a business
that is designed to serve a personal need."
Another option is to open a franchise of an established company. The
concept, brand following and business model are already in place; all you need
is a good location and the means to fund your operation.
Regardless of which option you choose, it's vital to understand the
reasoning behind your idea. Stephanie Desaulniers, director of operations and
women's business programmmes at Covation Center, cautions entrepreneurs
from writing a business plan or brainstorming a business name before nailing
down the idea's value.
"Many people think they have a great idea and jump into launching their
business without thinking through who their customers will be, or why these
people should want to buy from or hire them," Desaulniers said.
"Second, you need to clarify why you want to work with these customers – do
you have a passion for making people's lives easier? Or enjoy creating art to
bring color to their world? Identifying these answers helps clarify your mission.
Third, you want to define how you will provide this value to your customers
and how to communicate that value in a way that they are willing to pay."
During the ideation phase, you need to iron out the major details. If the
idea isn't something you're passionate about or if there's not a market for your
creation, it might be time to brainstorm other ideas.
2. Write a business plan.
Once you have your idea in place, you need to ask yourself a few
important questions: What is the purpose of your business? Who are you selling
to? What are your end goals? How will you finance your startup costs? These
questions can be answered in a well-written business plan.
A lot of mistakes are made by new businesses rushing into things without
pondering these aspects of the business. You need to find your target customer

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base. Who is going to buy your product or service? If you can't find evidence
that there's a demand for your idea, then what would be the point?
 Conduct market research.
Conducting thorough market research on your field and demographics of
potential clientele is an important part of crafting a business plan. This involves
conducting surveys, holding focus groups, and researching SEO and public
data.
Market research helps you understand your target customer – their needs,
preferences and behavior – as well as your industry and competitors. The U.S.
Small Business Administration (SBA) recommends gathering demographic
information to better understand opportunities and limitations within your
market.
The best small businesses have products or services that are differentiated from
the competition. This has a significant impact on your competitive landscape
and allows you to convey unique value to potential customers. A guide to
conducting market research can be found on our sister site, business.com.
 Consider an exit strategy.
It's also a good idea to consider an exit strategy as you compile your
business plan. Generating some idea of how you'll eventually exit the business
forces you to look to the future.
"Too often, new entrepreneurs are so excited about their business and so
sure everyone everywhere will be a customer that they give very little, if any,
time to show the plan on leaving the business," said Josh Tolley CEO of both
Tribal Holdings and Kavana.
"When you board an airplane, what is the first thing they show you? How
to get off of it. When you go to a movie, what do they point out before the
feature begins to play? Where the exits are. Your first week of kindergarten,
they line up all the kids and teach them fire drills to exit the building. Too many
times I have witnessed business leaders that don't have three or four pre-
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determined exit routes. This has led to lower company value and even destroyed
family relationships."
A business plan helps you figure out where your company is going, how it will
overcome any potential difficulties and what you need to sustain it.
3. Assess your finances.
Starting any business has a price, so you need to determine how you're
going to cover those costs. Do you have the means to fund your startup, or will
you need to borrow money? If you're planning to leave your current job to focus
on your business, do you have money put away to support yourself until you
make a profit? It's best to find out how much your startup costs will be.
Many startups fail because they run out of money before turning a profit.
It's never a bad idea to overestimate the amount of startup capital you need, as it
can be a while before the business begins to bring in sustainable revenue.
Perform a break-even analysis.
One way you can determine how much money you need is to perform a break-
even analysis. This is an essential element of financial planning that helps
business owners determine when their company, product or service will be
profitable.
The formula is simple.
 Fixed Costs / (Average Price – Variable Costs) = Break-Even Point
Every entrepreneur should use this formula as a tool because it informs you
about the minimum performance your business must achieve to avoid losing
money. Furthermore, it helps you understand exactly where your profits come
from, so you can set production goals accordingly.
Here are the three most common reasons to conduct a break-even analysis:
 Determine profitability. This is generally every business owner's highest
interest. Ask yourself: How much revenue do I need to generate to cover
all my expenses? Which products or services turn a profit and which ones
are sold at a loss?
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 Price a product or service. When most people think about pricing, they
consider how much their product costs to create and how competitors are
pricing their products. Ask yourself: What are the fixed rates, what are
the variable costs, and what is the total cost? What is the cost of any
physical goods and what is the cost of labour?
 Analyze the data. What volumes of goods or services do you have to sell
to be profitable? Ask yourself: How can I reduce my overall fixed costs?
How can I reduce the variable costs per unit? How can I improve sales?
Watch your expenses.
Don't overspend when starting a business. Understand the types of purchases
that make sense for your business and avoid overspending on fancy new
equipment that won't help you reach your business goals.
"A lot of startups tend to spend money on unnecessary things," said Jean
Paldan, founder and CEO of Rare Form New Media. "We worked with a startup
that had two employees but spent a huge amount on office space that would fit
20 people. They also leased a professional high-end printer that was more suited
for a team of 100 (it had keycards to track who was printing what and when).
Spend as little as possible when you start and only on the things that are
essential for the business to grow and be a success. Luxuries can come when
you're established."
If you need financial assistance, a commercial loan through a bank is a
good starting point, although these are often difficult to secure. If you are
unable to take out a bank loan, you can apply for a small business loan through
the Small Business Administration (SBA) or an alternative lender.
Startups requiring significant funding upfront may want to bring on an
investor. Investors can provide several million dollars or more to a fledgling
company, with the expectation that the backers will have a hands-on role in
running your business.

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Alternatively, you could launch an equity crowdfunding campaign to
raise smaller amounts of money from multiple backers. Crowdfunding has
helped numerous companies in recent years, and there are dozens of reliable
crowdfunding platforms designed for different types of businesses.
Choose the right business bank.
When choosing the right business bank, size matters. Marcus Anwar, co-
founder of OhMy.Canada recommends smaller community banks because they
are in tune with the local market conditions and will work with you based on
your overall business profile and character.
"They're unlike big banks that look at your credit score and will be more
selective to loan money to small businesses," Anwar said. "Not only that, but
small banks want to build a personal relationship with you and ultimately help
you if you run into problems and miss a payment. Another good thing about
smaller banks is that decisions are made at the branch level, which can be much
quicker than big banks where decisions are made at a higher level."
Anwar believes that when choosing a bank for your business, you should
ask yourself these questions:
 What is important to me?
 Do I want to build a close relationship with a bank that's willing to help me
in any ay possible?
 Do I want to be just another bank account like big banks will view me as?
Ultimately, choosing the right bank for your business comes down to the needs
of your business. Writing down your banking needs can help narrow your focus
to what you should be looking for. Schedule meetings with various banks and
ask questions about how they work with small businesses to find the best bank
for your business
4. Determine your legal business structure.

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Before you can register your company, you need to decide what kind of
entity it is. Your business structure legally affects everything from how you file
your taxes to your personal liability if something goes wrong.
If you own the business entirely by yourself and plan to be responsible
for all debts and obligations, you can register for a sole proprietorship. Be
warned that this route can directly affect your personal credit.
Alternatively, a partnership, as its name implies, means that two or more
people are held personally liable as business owners. You don't have to go it
alone if you can find a business partner with complementary skills to your own.
It's usually a good idea to add someone into the mix to help your business
flourish.
If you want to separate your personal liability from your company's
liability, you may want to consider forming one of several types of corporations.
This makes a business a separate entity apart from its owners, and, therefore,
corporations can own property, assume liability, pay taxes, enter contracts, sue
and be sued like any other individual.
One of the most common structures for small businesses, however, is
the limited liability corporation. This hybrid structure has the legal protections
of a corporation while allowing for the tax benefits of a partnership.
Ultimately, it is up to you to determine which type of entity is best for
your current needs and future business goals. It's important to learn about the
various legal business structures that are available. If you're struggling to make
up your mind, it's not a bad idea to discuss the decision with a business or legal
adviser.
5. Register with the government
To become an officially recognized business entity, you must register with the
government. Corporations will need an "articles of incorporation" document,
which includes your business name, business purpose, corporate structure, stock
details and other information about your company.

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6. Purchase an insurance policy.
It might slip your mind as something you'll "get around to" eventually, but
purchasing the right insurance for your business is an important step that should
happen before you officially launch. Dealing with incidents such as property
damage, theft or even a customer lawsuit can be costly, and you need to be sure
that you're properly protected.
If your business will have employees, you will, at a minimum, need to
purchase workers' compensation and unemployment insurance.
7. Build your team.
Unless you're planning to be your only employee, you're going to need to hire a
great team to get your company off the ground. Joe Zawadzki, CEO and
founder of MediaMath, said entrepreneurs need to give the "people" element of
their businesses the same attention they give their products.
"Your product is built by people," Zawadski said. "Identifying your
founding team, understanding what gaps exist, and [determining] how and when
you will address them should be top priority. Figuring out how the team will
work together ... is equally important. Defining roles and responsibility, division
of labor, how to give feedback or how to work together when not everyone is in
the same room will save you a lot of headaches down the line."
8. Choose your vendors.
Running a business can be overwhelming, and you and your team
probably aren't going to be able to do it all on your own. That's where third-
party vendors come in. Companies in every industry from HR to business phone
systems exist to partner with you and help you run your business better.
When you're searching for B2B partners, you'll have to choose carefully.
These companies will have access to vital and potentially sensitive business
data, so it's critical to find someone you can trust. In our guide to choosing
business partners, our expert sources recommend asking potential vendors about

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their experience in your industry, their track record with existing clients and
what kind of growth they've helped other clients achieve.
9. Brand yourself and advertise.
Before you start selling your product or service, you need to build up
your brand and get a following of people ready to jump when you open your
literal or figurative doors for business.
Create a logo that can help people easily identify your brand, and be
consistent in using it across all of your platforms, including your all-
important company website. Use social media to spread the word about your
new business, perhaps as a promotional tool to offer coupons and discounts to
followers once you launch.
10. Grow your business.
Your launch and first sales are only the beginning of your task as an
entrepreneur. To make a profit and stay afloat, you always need to be growing
your business. It's going to take time and effort, but you'll get out of your
business what you put into it.
Collaborating with more established brands in your industry is a great
way to achieve growth. Reach out to other companies and ask for some
promotion in exchange for a free product sample or service. Partner with a
charity organization, and volunteer some of your time or products to get your
name out there. To grow your business quickly.
These first chapter leads us to see how the needs of human beings and
animals are met and those who do so called entrepreneurs.

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