UCS102 ENTREPRENEURSHIP IN ASIA

TOPIC 4: STARTING THE BUSINESS

Choosing a Legal Form of Business Organization

Choose Your Register Register with

Business Your State
Name Agencies
Business
Name
Starting a New Business
• The advantages of starting a new business

Ability to
determine business Flexibility Cost minimization
direction

Business chance
New lifestyle
when purchasing is
goals
not an option
The Disadvantages of starting a
New Business

Lack of established
Raising capital
customer base

Cash flow shortages Learning curve expenses

Cost of Start-up Venture
Any starting business will need to meet the following cost:
• Licenses and permits required to operate the business
• Working capital
• Communication equipment : example: telephones, computers, fax machines
• Operating plan and equipment
• Staff recruitment expenses
• Insurance
• Raw materials (or trading stock)
• Rental of premises (unless working from owner’s home)
• Stationery
Purchasing an Existing Business
Advantage of purchasing an existing business is that allows a proprietor to begin
trading immediately, since established business operation, cash flow, staff, product
range and customer base already exist.

Easier to arrange finance for the venture.

Selection of the Location
Obtaining Initial Capital

• Definition of Initial Capital

The initial investment or money used to start a business.
The funds, or capital, may come from a bank loan, a government grant,
outside investors, or the business owner's personal savings.

The money is used to cover such startup costs as purchasing building,

purchasing equipment and supplies, and hiring employees.
Obtaining Initial Capital
Developing Business Plan

• Business plan definition:

A written document that describes in detail how a new business is going

to achieve its goals.
A business plan will lay out a written plan from a marketing, financial
and operational viewpoint
Business Plan
Business Plan
Executive Summary
Business Plan
Mission Statement
Business Plan
Mission Statement
Business Plan
Company Background
Business Plan
Product and Services
Business Plan
Marketing Plan
Business Plan
Market Overview
Business Plan
SWOT
Business Plan
Operations
Legal and licensing requirements

Management details

Organizational structure and staffing

Business Plan
Operations
Professional advisers

Insurance and security issues

Business premises
Business Plan
Operations
Equipment required

Production processes

Critical risk/contingency plans

Business Plan
Financial Planning

Calculation of
income and expenses

Financing of
business

Distribution of
profits
Business Plan
Financial Planning

Good and services

tax

Loans

Analysis of financial
forecast
Activity
• Summaries the seven major elements of a business plan.
• Explain how business plans may differ from one firm to
another.
• Why does a business plan need to contain so much detailed
information?