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Class : 11
Unit : Business

Point out the consideration before starting a new business. Explain them.

Ans : Business means the art of being busy. It involves in the production, distribution and exchange goods and services. The aim of business is to earn profit by satisfying customers. The higher number of industries has increased competition among the investors. Before starting the business the following factors should be considered in order to survive and expend the business: i) Identification of Business:- It is the first factor that businessman should consider before starting a business. A potential investor has to identify whether he is starting industry, trade or service sector. ii) Detail Investigation and research:- Proper and detail study about the scope of business is very vital. Detail Investigation and research:-Proper and detail study about the scope of business is very vital. One has to undertake the investigation about cost and benefits level if competition, raw material, finance, potential customer etc. iii) Knowledge and interest of businessman:- A businessman needs to start such business in which he has full knowledge about how to start , process and accomplish business activities. Besides, he must have interest in doing business which develops the feeling of dedication and hardworking. iv) Forms of Business Organization:- There are different forms of business organization. According to the different in capital, merits, demerits, risk, size and so on. It must be chosen from various forms of organization like sole trading concern, partnership firm, Joint Stock Company and so on. v) Selection of location of Business:- Location means the place where the business establishes. For selection of business location businessman has to consider various factors like availability of manpower, raw materials, transportation, communication, water, electricity etc. Business must be located at perfect place. vi) Provision of Capital:- Capital means finance. It is the life blood of organization. Business cannot establish without sufficient capital. The size of the business organization depends upon the amount of capital. Business organization needs two types of capital that is fixed capital and working capital. Land, building, machinery et6c comes under fixed capital whereas salary and wages, rent, taxes, etc. comes under working capital. vii) Government Policy:- Government makes business policy for the welfare of people it must follow the policy of government. It must have the knowledge about all the legal rules and regulation formulated by the government. viii) Selection of staffs:- The successful functioning of business totally depends upon the activities of employees. Depending upon the nature and size of the organization the investors should estimate numbers of workers, their experience, skills, abilities, education, etc. Right staff should be placed at right job. ix) Office equipment and materials:- Office is the place where all administrative work of business has to be done. It is known as brain of organization. Therefore, office needs proper equipment, machines, furniture, computer and other resources. For accurate and speedy performance, office setup must be good. x) Proper Business Premise:- The business premises involved selection of building must be in environment. The office building must be in accordance of nature and size of business. It may be purchased, constructed or taken on rent.
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