The factors to consider before being an entrepreneur are the major ways to establish and run an enterprise successfully as an entrepreneur, it is necessary to perform the activities listed in this post.
- Deciding to go into business: An entrepreneur must know why he is deciding to go into business. He must be able to finalize this decision within himself that he actually wants to be his own boss. That is, he must be able to deal with all personal biases and double –mindedness whether to go into business or not. This will enable him set some personal objectives concerning the business.
- Analyses of oneself: an entrepreneur having decided to go into business of his own, must sit down and analyse himself to find out his strengths and weaknesses. In doing this, he must be honest with himself in putting down those things in him that will enhance his business and those likely to pull him down, if not dealt with. If he still wants to go into business, he must start there and then to thrash out those weaknesses of his.
- Choice of product or service: choosing the product is the service to trade on should be the next step. An entrepreneur, in choosing his product or service must go for those products he is familiar with and not the ones he knows little or nothing about. He must be able to convince himself that the chosen product/service is the best of all. That, apart from the product/service there is no other he can trade on, considering if the product/service is capable of meeting consumers’ need and has the tendency of growing fast. It must be a product/service he will be proud of any-time and anywhere.
- Marker research: having decided on the product/service to trade on, an entrepreneur should proceed to get information that will enable his business grow fast. Information on the customers’ desires, his competitors, what makes them what they are, the prices of their products/services, location, channel of distribution, sources of raw materials. Their customers’ opinions about them, their behaviour and what makes their product/service unique.
This fact finding will help an entrepreneur know how to penetrate into the market and how to become a leader in that market. Market research also helps an entrepreneur to formulate strategies for his marketing activities in the areas of price-setting, production, product quality. Etc.
- Revenue forecast: revenue forecast is the projection of the expected revenue of the business. This however, depends on an entrepreneur’s ability in estimating his customer’s income, employee’s remuneration, equipment to be used and other operating expenses. Information gathered from the market survey enables an entrepreneur carry this out.
- Choosing allocation: in choosing his location, an entrepreneur must know where he wants to locate the business and the reason behind his choice. The choice of business location depends on the nature and size of the business, other factors include:
- Economic factors such as the demand factor, degree of competition and the income of the people.
- The availability of infrastructure
- The socio-cultural setting of the people
- The availability of raw materials
- Proximity to market
- Financial capability of the entrepreneur
- The availability of similar business in the area
- The entrepreneur’s’ personal preference.
- Production plan development: this will only come in, if an entrepreneur is going into manufacturing. The plant layout and the product design of the business must be considered, so also the type of equipment/plant needed for production and the technical requirements of the equipment in terms of repairs and expansion. The landscaping, floor spacing, production process and the raw materials specification will all come into consideration too.
- Marketing plan: an entrepreneur will draw a business plan for the marketing activities of his business. This has to do with the marketing functions of the business, which include:
- The target market through segmentation
- The product quality
- The product size, colouring and packaging
- The product price
- The promotional tools to be used for advertisement
- The channel of distribution to be adopted.
- Establishing a personnel plan: the personnel requirement of the business must be planned for. Tis will help the entrepreneur know:
- Who is to do what. Whom to report to
- What type of job to be done
- The qualification of the employees for the jobs
- How much is to be paid to each person
- The type of motivational theory to adopt
- The type of organisational structure to adopt.
- Deciding on the business to operate: An entrepreneur would have known different types of business organisations, their advantages and disadvantages. Based on this information, he will take a decision on the type of business to go into, whether sole proprietorship, partnership or company; and the form, whether manufacturing, distribution or a service company.
- Recording of the business transactions: An entrepreneur must decide on the recording systems to adopt for his purchases and sales transaction, income and expenditure and other financial activities of the business the business transactions must be on record right from the first day of business. A particular account system that is inconsistent with accounting standard must be adopted.
- Adopting an insurance plan: an entrepreneur should be ready to insure the risk of uncertainty by adopting insurance policies. This is one of the most neglected aspects of business activities by some entrepreneurs, probably due to lack of trust on the part of insurance companies. An entrepreneur must be familiar with different insurance policies and know the best to adopt for his business. To be able to do this, it is advisable for him to conduct a risk management and analysis programme, which will help him know the types of risks involved, the ones to avoid, transfer and manage.
- Adopting a financial plan: It is not enough for an entrepreneur to adopt an accounting/recording system, he must also develop a financial plan for the business. The financial plan is a monetary expression of the entrepreneur’s expected income and operating expenses.
Financial planning and controlling depends on the entrepreneur’s abilities in understanding financial matters. Where the entrepreneur does not have a formal knowledge of how to prepare a financial plan, he should seek the services of a qualified accountant. However, financial plan contains the cash budget. Profit and loss account, balance sheet, cash flow statement, break-even analysis. The knowledge of these will help him in handling the financial aspect of the business effectively.
FACTORS TO CONSIDER BEFORE BEING AN ENTREPRENEUR
Those are the factors to consider before being an entrepreneur and it is only logical for any and all entrepreneurs to be prepared to perform the highlighted factors with consistency and diligence so as to succeed as an entrepreneur.