What are the key factors to be considered before starting a new venture?

Factors to be considered before starting a business are:

  1. Selection of business activity : The first decision relating to the establishment of a new enterprise is to select the nature and type of business activities. After deciding the nature of business activities, the entrepreneur has to assess the profitability of the proposed business activity.
  2. Choice of form of ownership: A business firm may take the form of a sole proprietorship, partnership or a joint stock company depending upon the size of business, capital requirements, managerial skill requirements, limit of liability, legal formalities, etc.
  3. Financial planning : The promoter or entrepreneur has to make sufficient amount of capital available for the establishment and smooth operations of the business.
  4. Location of business: An entrepreneur must search out the location at which the organisation will have easy access to raw materials labour, power, market, etc.
  5. Size of business unit: It is determined by various
    factors like technical, managerial, financial and marketing facilities.
  6. Machines and equipments : The entrepreneur s
    has to arrange for required plants machinery equipments. It will depend upon various factors I like availability of funds, scale of operations, market ; conditions, etc.
  7. Tax implications : Business has tax implications. Therefore, care should be taken about various
    types of taxes like VAT, excise duty, service tax, etc.
  8. Launching the business : After the arrangement of the required physical financial, human resources the fulfillment of legal formalities, an entrepreneur can finally go ahead with actual launch of the enterprise. It means starting the operations and initiating sales promotion campaign.