INTRODUCTION
The
topic above is an important and very interesting topic that consist of three
vital words which are useful in our society today these three words are:
business, development and research. I am going to define as well as look into
this words one after the other firstly.
WHAT IS BUSINESS:
MEANING AND DEFINITION
A business, also known as an
enterprise or a firm, is an organization involved in the trade of goods,
services or both to consumers. Business is an economic activity, which is
related with continuous and regular production and distribution of goods and
services for satisfying human wants.
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.
DICKSON: 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
earing profits under uncertain market conditions. Business can refer to a
particular organization or, more generally to an entire market sector e.g. the
music business. Business is the sum total of activity involved in introduction,
purchase of making profit.
FEATURES OF BUSINESS
The features of businesses are as follows:
1. EXCHANGE
OF GOODS AND SERVICES:- All business activities are
directly or indirectly concerned with the exchange of goods and services for
money’s worth.
2. 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.
3. PROFIT IS
THE MAIN OBJECTIVE:- Business is carried on with the
intention of earning a profit. The profit is a reward for the services of a
businessman.
4. BUSINESS
SKILLS FOR ECONOMIC SUCCESS:- Anyone cannot
run a business. To be a good businessman, one needs to have a goods business
qualities and skills. A business man needs experience and skills to run a
business.
5. RISKS AND
UNCERTAINTIES:- 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 borne by the businessman.
6. BUYER AND SELLER:-
Every business transaction has minimum of two parties that is a buyer and a
seller. Business in nothing but a contrast or an agreement between a buyer and
a seller.
7. 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.
8. MARKETING
AND DISTRIBUTION OF GOODS:- Business activities may be concerned with
marketing or distribution of goods in which case it is called commercial activity.
9. DEALS
IN GOODS AND SERVICES:- Business, there have to be dealings in goods or
services. Goods may be divided into the followings:-
CONSUMER
GOODS which are used by final consumer for
consumption e.g TV while
PRODUCER
GOODS: are goods used by producer for further
production e.g machinery, equipment etc. Services are intangible but can be be
exchanged for value like providing transport, warehousing and insurance
services.
10. 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.
11. 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.
MAJOR FACTORS AFFECTING HOW A BUSINESS IS DEVELOPED.
---THE SIZE AND SCOPE OF THE BUSINESS FIRM
The size and scope of the business
firm and its structure, management and ownership, broadly analyzed in the
theory of the firm. Generally a smaller business is more flexible than a larger
business or those with wider ownership or more formal structures, will usually
tend to be organized as corporations less often partnerships. In addition a
business that wishes to raise money on a stock market or to be owned by a wide
range of people will often be required to adopt a specific legal form to do so.
--- THE SECTOR AND COUNTRY
Private profit making businesses are
different form government owned bodies in some countries, certain businesses
are legally obliged to be organized in certain ways.
--- LIMITED LIABILITY COMPANIES.
Limited liability partnership and
other specific types of business organization protect their owners or share holders
from failure by doing business under a separate legal entity with certain legal
protections. In contrast, unincorporated business or persons working on their
own are usually not so protected.
--- DISCLOSURE AND COMPLIANCE REQUIREMENTS
Different business structures may be
required to make less or more information public and may be bound to comply
with different rules and regulations.
---TAX ADVANTAGES
Different
structures are treated differently in tax law, and have advantages for this
reason.
REVIEW: Business has
earlier been defined as an organization or economic system where goods and
services are changed. Therefore what is development?
WHAT IS DEVELOPMENT?
Development can be defined as the
use of scientific and technical knowledge to meet specific objectives or
requirements.
The term development in
international parlance therefore encompasses the need and the means by which to
provide better lives for people in poor countries. It includes not only
economic growth although that is crucial but also human development, providing
for health, nutrition, education and a clean environment.
Development is the process of
economics and transformation that is based on complex cultural and environment
factors and their interactions.
Development can be defined as the
process of adding improvements to a parcel of land, such as grading
subdivisions, drainage, access, roads and utilities. It is an extension of the
theoretical or practical aspect of a concept design, discovery of intention.
DEFINITION OF BUSINESS DEVELOPMENT.
Business development comprises a
number of tasks and processes generally aiming at developing and implementing
growth opportunities between multiple organizations. It is a subset of the
fields of business, commerce, and organizational theory. Business development
is the creation of long term value for an organization from customers, markets
and relationships.
OVERVIEW
In the limited scholarly work
available on the subject, business development is conceptualized as or related
to discrete projects, specific modes of growth and organization units,
activities and practices. Senior business developers, and venture capitalists
from successful high teach firms from Europe, NorthAmerica and India into one
general structure.
In
this perspective, business development refers to: “tests and processes
concerning analytical preparation of potential growth opportunities, the
support and monitoring of the implementation of growth opportunities, but does
not include decisions on strategy and implementation of growth opportunities.
Sorensen (2012).
These tasks and process are
performed by “business developer”. Given the native process development
activities the business development function is typically organized as a staff
function.
BACKGROUND
The term business development and
its actor, the business developer, have evolved into many usages and
applications. Today, the application of business development and the business
developer’s tasks across industries and countries. Business development had its
origins in the Industrial Revolution.
PROFESSIONALS (BUSINESS DEVELOPERS)
The business developers is concerned
with the analytical preparation of potential growth opportunities for the
senior management or board of directors as well as the subsequent support and
monitoring of its implementations. Both in the development phase and the
implementation phase, the business developer collaborates and integrates the
knowledge and feedback from the organization’s specialist functions. For example:
production, marketing and sales to assure that the organization is capable of
implementing the growth opportunity successfully. The business developers tools
to address the business development tasks are the business model answering “how
do we make money” and its analytical backup and roadmap for implementation, the
business plan.
Business development professional
frequently have had earlier experience in financial services, investment
banking on management consulting; although some find their route to this area
by climbing the corporate ladder in functions such as operations management or
sales. Skills sets and experience for business development specialist usually
consist of a mixture of the following (depending on the business requirements):
·
Finance
·
Marketing
·
Mergers and acquisitions
·
Legal
·
Strategic Management
·
Proposal Management or Capture
Management
·
Sales experiences
The
“pipeline” refers to flow of potential events which a company has started
developing. Business development staff assign to each potential clients in the
pipeline a percent chance of success, with projected sales. Volumes attached.
Planners can use the weighted average of all the potential clients in the
pipeline to project staffing to manage the new activity when finalized.
Enterprises usually support pipelines with some kind of Customer Relationship
Management (CRM) tool or database, either web-based solution or an in-house
system. Sometimes business development specialists manage and analyze the data
to produce sales Management Information (MI).
Such
Management Information Includes:
·
Reasons for wins / losses
·
Progress of opportunities in
relation to the sales process.
·
Top performing sales people /
sales channels
·
Sales of services / products.
For
well established companies especially in technology related industries,
“business development. Refers to setting up and managing strategic
relationships and alliances with other, third party companies.
Business
development focuses on implementation of the strategic business plan through
equity establishment of strategic partnerships where appropriate.
How
to become a business development manager
Business development managers work
with companies to develop, expand and generate new business opportunities.
Responsibilities for those working with this industry may vary depending on the
type of company and the business services and products provided. Generalized
tasks may include marketing, product development and distribution, writing
contract proposal and presentations and meeting with potential new clients.
Although there are no specific, requirements for successfully endearing the
field, becoming a business development manager requires developed capabilities
in the areas of business administration, economics and finance as well as
strong communications and regatiating skills business development manager:-
·
Conduct some initiate search on
the field of business development if you have no experience obtained through
past jobs or education. This is important so that you can learn more about the
focus of the industry to assess your own capabilities and background in
determining what training you many need.
·
Realize that core aptitude
requirements to become a successful business development manager include
excellent interpersonal skills as the position entails regular contact with
potential and existing clients. This type of work requires strong public
relations and presentation skills.
·
Infunctions as a business
development manager can include responsibilities in overseeing the work of
fellow employees. A typical work day may entail some level of human resource
duties such as conducting training sessions and workshops.
·
Complete an internship, if you
are currently already a college students preparing for a career as a business
development manager. Meet with your academic advisor to make the formal
arrangements or you may contact several companies yourself to explore your
options.
·
Register with a professional
association online that caters to the business development industry. You will
be provided with access to a variety of valuable industry tools and resources
that will assist you while you are looking for a position.
·
Visit job fairs if you have already
graduated from college and have obtained your degree in preparation for
becoming a business development manager. Network with others already working
within the field to make new contacts and to possibly arrange job interviews.
·
Explore the many online job
boards and browse through available openings for a position as a business
development manager.
·
Job boards also provide you with
the option of creating a personal profile and uploading your resume to make
yourself more visible to potential employers.
BUSINESS DEVELOPMENT RELATING TO BUSINESS PLAN
For
one’s business to develop effectively and efficiently, a business plan is
needed and required.
We are now going to look briefly at the following:-
Ø What
is a business plan?
Ø Who
needs a business plan?
Ø Choosing
the right kind of business plan to develop business
Ø What
to include in your business plan
Ø Using
your business plan to get ahead
WHAT IS A BUSINESS PLAN?
In its simplest form, a business
plan is a guide, a roadmap for your business that outlines goals and details
how you plan to achieve those goals. A business plan is just a plan for how
your business to make it succeed.
Many people think of business plans
only for starting a new business or applying for business loans. But business
plans are also vital for running a business whether or not it need new loans or
new investments. Existing business should have business plans that they
maintain and update as market conditions change and as new opportunities arise.
WHO NEEDS A BUSINESS PLAN?
If one is just planning on picking
up some freelance work to supplement your income, one can skip the business
plan. But, if one embarking on a more significant endeavour that’s likely to
consume a significant amount of time, money and resources then, one needs a
business plan. If one is serious about developing his/her business, taking
planning seriously is critical to your success.
Start
up businesses
The most classic business planning
is for a startup, for which the plan helps the founders break uncertainty down
into meaningful pieces, like the sales projection, expense budget, milestones
and tasks. The need becomes obvious as soon as you recognize the you don’t know
how much money you need and when you need it, without laying out projects
sales, costs, expenses and timing of payments. And that’s for all startups,
whether or not they need to convince investors, banks, or friends and family to
part with their money and fund the new venture. In this case, the business plan
is focused on explaining what the new company is going to do, hoe it is going
to accomplish its goals and most importantly why the founders are the right
people to do the job. A startup business plan also details the amount of money
needed to get the business off the ground, and through the initial growth
phases that will lead (hopefully) to profitability.
EXISTING BUSINESSES
Not all business plans are for
startup that are launching the next big thing. Existing businesses use business
plans to manage and steer the business not just to address changes in their
markets and to take advantage of new opportunities. They use a plan to
reinforce strategy, establish metrics, manage responsibilities and goals, track
results, and manage and plan resources including critical cash flow. And of
course they use a plan to set the schedule for regular review and revision.
Business plans can be a critical
driver of growth for existing businesses. Do you know that businesses that
write plans and use them to manage their businesses grow 30 percent faster than
business that take a “seat of the parts” approach? For existing business, a
robust business planning process can be a competitive advantage that drives
faster growth and greater innovation. Instead of a static document, business
plans in existing businesses become dynamic tools that are used to track growth
and spot potential problems before they derail the business.
CHOOSING THE RIGHT KIND OF BUSINESS PLAN TO DEVELOP
BUSINESSES
Before you even start writing your
business plan, you need to think about who the audience is and what the goals
of your plans are. While there are common components that are found in almost
every business plan, such as forecasts and marketing strategy, business plan
formats can be very different depending on the audience and the type of
business.
For example, if you’re building a
plan for a biotech firm, your plan will go into details about government
approval processes. If you are writing a plan for a restaurant, details about
location and renovations might be critical factors and the language you’d use
in the biotech firm’s business plan would be much more technical than the
language you’d use in the plan for the restaurant.
Plans can also differ greatly in
length, detail and presentation. Plans that never leave the office and are used
exclusively for internal strategic planning and management might use more
casual language and might not have much visual polish. On the other end of the
spectrum, a plan that destined for the desk of a top venture capitalist will
have a high degree of polish and will focus on the high-growth aspects of the
business and the experienced team that is going to deliver stunning results.
The three common types of business plan include:-
v ONE-PAGE BUSINESS PLAN
A
one-page business plan is exactly what is sounds like: a quick summary of your
business delivered on a single page. No, this doesn’t mean a very small font
size and cramming tens of information onto a single page……..it means that the
business is described in very concise language that is direct and to-the point.
A
one page business plan can serve two purposes. First, it can be a great tool to
introduce the business to outsiders, such as potential investors. Since
investors have very little time to read detailed business plans. A simple
one-page plan is often a better approach to get that first meeting. Later in
the process, a more detailed plan will be needed, but the one-page plan is
great for getting in the door.
This
simplest plan formed is also great for early-stage companies that just want to sketch
out their idea in broad strokes. Think of the one-page business plan as an
expanded version of getting your idea down on a napkin keeping the business
idea on one page makes it easy to see the entire concept at a glance and
quickly refine concepts as new ideas come up.
v THE INTERNAL BUSINESS PLAN
The
internal business plan dispenses with the formalities that are needed when
presenting a plan externally and focuses almost exclusively on business
strategy, milestones, metrics, budgets and forecasts. And of course it also
includes the review schedule for monthly review and revision. These internal
business plans are management tools used to guide the growth of both startups
and existing business. They help business owners think through strategic
decisions and measure progress towards goals.
EXTERNAL BUSINESS PLAN / THE STANDARD BUSINESS PLAN
DOCUMENT
External business plans, the formal
business plan documents are designed to be read by outsiders to provide information
about a business. The most common use is to convince investors to fund a
business, and the second most common is to support a loan application.
Occasionally this types of business plan is also used to recruit or train or
absorb key employees, but that is much less common.
A formal business plan documents is
an extension of the internal business plan. It’s mostly a snapshot of the
internal plan as it existed at a certain time. But while the internal plan is
short on polish and formality, a formal business plan document should be very
well-presented, with more attention to details in the language and format.
In addition, an external plan
details how potential funds are going to be used. Investors don’t just hand
over cash with no strings attached-they want to understand how their funds will
be used and what the expected on their investment is.
Finally, external plans put a strong
emphasis on the team that is building the company. Investors invest in people
rather than ideas, so it’s critical to include biographies of key team members
and how their background and experience is going to help the growing of the
company.
WHAT TO INCLUDE IN A BUSINESS PLAN
While we just discussed several
different types of business plans, there are key elements that appear in
virtually all business plans. These include the review schedule, strategy
summary, milestones, responsibilities, metric (numerical goals that can be
tacked), and basic projections. The projections include sales, costs, expenses
and cash flow. There core elements
grows organically as needed by read by the business for actual business
purposes. And for the formal business plan document, to be read by outsiders
for business purposes such as backing a loan application or seeking investment,
the following summarize those special-case, what is included in businesses
plans.
v
EXECUTIVE
SUMMARY
Just
like the old adage that you never get a second chance to make a first
impression, the executive summary is your business’s calling card. It needs to
be succinct that hit the key highlights of the plan. Many potential investors
will never take it beyond the executive summary, so it needs to be compelling
and intriguing.
The
executive summary should provide a quick overviews of the problem your business
solve, your solution to the problem, the business’s target market, key
financial highlight, and summary of who does what on the management team.
While
it’s difficult to convey everything you might want to convey in the executive
summary, keeping it short is critical. If you hook your reader, they will find
more detail in the body of the plan as they continue reading. You could even
consider using your one-page business plan as your executive summary.
COMPANY OVERVIEW
For external plans, the company
overview is a brief summary of the company’s legal structure, ownership,
history and location. It’s common to include a mission statement in the company
overview, but that is certainly not a critical component of all business plans.
The company’s overview is often
omitted from internal plans.
Products
and services
The products and services chapter of
a business plan delves into the core of what you are trying to achieve in this
section, you will detail the problem you are solving, and how you are solving
it, the competitive landscape and your business’s competitive edge.
Depending on the type f business you
want to develop, this section may also detail the technologies you are using,
intellectual property that you own, and other key factors about the products
that you are building now and plan on building in the future.
TARGET MARKETS
As critical as it is, that your
business is solving a real-world problem that people on other businesses have,
it’s equally important to detail who you are selling to. Understanding your
target market is key to building marketing campaign and sales processes that
work. And, beyond marketing; your target market will define how the growth and
development of your business runs.
MARKETING AND SALES PLAN
The marketing and sales plan details
the strategies that you will use to reach your target market.
This
portion of your business plan provides an overview of how you will position
your business in the market, how you will price your products and services, how
you will promote your offerings and any sales processes you need to have in
place.
MILESTONE AND METRICS
Plans are nothing without solid
implementation. The milestones and metrics chapter of your business plan lays
out concrete tasks that you plan to accomplish, complete with due dates and the
names of the people to be held responsible.
This chapter should also detail the
key metrics that you plan to use to tracks the growth of your business. This
could include number of sales leads generated, the number of page views to your
website, or any critical metric that help determine the health of your business.
MANAGEMENT TEAM
The management team chapter of a business
plan is critical for entrepreneurs seeking investment, but can be omitted for
virtually any other type of plan
The management team section should
include relevant team bios that explain why your management personnel are the
right people for their jobs. After all, good ideas are a dime a dozen- it’s a
talented entrepreneur who can take those ideas and turn them into thriving
businesses.
Business plan should help identify
not only strengths of a business, but areas that need improvement and gaps that
need to be filled. Identifying gaps in the management team show knowledge and
foresight, not a lack of ability to build or develop the business.
FINANCIAL PLAN
The financial plan is a critical
component of nearly all business plan. Running a successful business means
paying close attention to how much money you are bringing in, and how much
money you are spending. A good financial plan goes a long way to help determine
when to hire new employees or buy new equipments.
For start up businesses, a solid
financial plan helps you figure out how much capital or income or money your
business needs to get started or to grow or to develop, so that you will know how
much you have invested into the business and how profits are going to be
obtained. Example:-
A
typical financial plan includes:-
·
Sales fore cast
·
Personal plan
·
Profit and loss statement
·
Cash flow statement
·
Balance sheet.
USING
YOUR BUSINESS PLAN TO GET AHEAD IN DEVELOPING BUSINESS.
I
mentioned earlier that businesses that write business plans grow 30 percent
faster than businesses that don’t plan. Taking the simple step forward to do
any planning at all will certainly put your business at a significant advantage
over businesses that just drive forward with no specific plans.
But
just writing a business plan does not guarantee your success. The best way to
extract value from your business plan is to use it as an ongoing management
tool. To do this, your business plan must be constantly revisited and revisited
to reflect current conditions and the new information that you‘re collected as
you run your business.
When
you‘re running a business, you are learning new things every day: what your
customers like, what they don’t like; which marketing tactics work, which does
not. Your business plan should be a reflection of those learning to guide the
future strategy. This all sounds like a lot of work, but it does not have to
be. Here are some tips to extract the most value from your plan in the least
amount of time:
§ Use
your one page business plan to quickly outline your strategy. Use this document
to periodically review your high- level strategy.
§ Use
an internal plan to document processes that work. Share this document with new
employees to give them a clear picture of your overall strategy.
§ Set
milestones for what you plan to accomplish in the next 30 days. Assign these
tasks to team members. Set dates and allocate part of your budget if necessary.
§ Keep
your sales forecast and expense budget current. As you learn more about customer
buying patterns, revise your forecast.
§ Compare
your planned budget and forecasts with your actual results at least monthly.
§ Make
adjustments to your plan, based on the results.
The final most
important aspect of leveraging your business plan as a growth engine is to
schedule a monthly review. The review doesn’t have to take longer than an hour,
but it needs to be regular recurring meeting on your calendar. In your monthly
review, go over your key number compared to your plan, review the milestones
you planned to accomplish, set new milestones and do a quick review of your
overall strategy.
As
defined earlier,
Business
is the sum total of activity involved in introduction, purchasing and
distribution of goods and services for the purchase of making profit.
Development
can be defined as the use of scientific and technical knowledge to meet
specific objectives or requirements.
Therefore,
WHAT
IS RESEARCH?
Research
is the systematic investigation into the study of material and sources in order
to establish facts and reach new conclusions.
The
purpose of research can be a complicated issue and varies across different
scientific fields and disciplines.
DEFINITION
OF RESEARCH AND DEVELOPMENT
Research
and development (R& D) is a systematic activity combining both basic and
applied research, and aimed at discovering solution to problem or creating new
goods and knowledge. Research and development may result in ownership of
intellectual property such as patents. In accounting for research and
development costs, the development costs may be carried forward but the basic
and applied research costs are often written- off as incurred.
Create an idea or product that you
believe can be successful. This is easier said than done. Coming up with a
viable product or idea is sometimes harder than constructing a business plan.
Having a good business plan is important for every entrepreneur, but what if
you do not have an idea upon which to build a plan?
1. Get your creative juices flowing. There are many different ways to
accomplish this task. Play a game, read a book, paint a picture, play a sport,
etc. The point is, do something that gets you thinking and then focus that
energy into creating an idea/concept/product. Expose yourself to many different
environments that are outside of your comfortable zone. Get more engaged with
your hobbies. Expertise will help get closer to a viable business idea. Do not
try to force an idea to occur because this will usually result in bad ideas!
Take your time, focus your thought, and create the right product for you.
2. Know your limits. Determining these factors will help
you focus your thought process. For example, if you are interested in
computers, but have no education or experience with computers outside of
internet surfing or word processing, it will be difficult to create a
marketable idea for computer software components. Keep your thought process
reasonable. In other words, do not let your imagination run wild. When
you become good at creating ideas, then you can let your imagination do some
work, but not at first.
3. Seize upon any inspiration. Sometimes, ideas will pop up at the
oddest times. Get a small notebook to carry around with you and write ideas in.
This way you can look at your notebook and later begin to develop your idea.
Ask yourself, what types of businesses would you use? What are some common
issues that your associated complain about that could be solved through a
business.
4. Identify a problem. Think about how you can make the
world a better place with your invention or business idea. Your business should
revolutionize the way we live life, even if it's just a small way. For example,
if you are interested in cooking, maybe you have a problem with the way an oven
can dry out a chicken when cooking. Now that you have identified a problem,
brainstorm and think of as many solutions as possible. It does not matter how
crazy the solution is, just think about them and write them down. After you
have written down every possible solution, no matter how crazy, go through the
list and find the solution that you feel you can best accomplish. Surprise! You
have probably come up with an original idea. This does not mean that you should
pitch this idea tomorrow. All this means is that you should develop your idea,
mold your idea, and perfect your idea into something you think people would buy
if in the market. Also, this way of thinking will get your creative juices
flowing. You may find yourself traveling a different path from your original
field of interest. If this occurs, follow the thought until completion. You may
be surprised where it leads!
5. Study demographics to see which type
of customers will appreciate your business idea the most. Businesses generally appeal to a
specific set of demographics before they become viral. Decide if your idea has
the potential to be viral among a small group of people. Think about your
potential competition for the same demographics and how you can set yourself
apart from them.
FINDING A PERFECT BUSINESS
1. Understanding
your customer
This might seem strange to start
here as how do you know your customers before you have a business idea in
place. The answer is simple - your customers make the business, therefore
without customers there is no business. If you have a business idea don't try
to develop the idea around what YOU think potential customers will like or
need, but find out what your customers actually desire. Too often business owners
get an idea in their head and jump right in with both feet. However, they soon
find out that their target market does not want what they are offering.
Spending both time and money on a project just to see it languish is not the
perfect business idea.
Moreover, let's say you don't
already have an idea - getting out and understand consumers (those who will
eventually become your customers) may lead you to the perfect idea. Knowing
what potential consumers need and building products to meets those needs will get
customers beating a path to your door - that is a perfect business idea.
2. Passion
Passion here does not mean being
fanatical about your product or service. But, it does mean having some interest
in what you do. More times than not, you will be spending 15 to 18 hours a day
working on your business in the beginning - usually for the first 12 to 18
months (more like 2 years in this economy). You have to constantly be thinking
about ways to improve and grow your business as well as be out talking about it
to everyone, everywhere. If you end up starting a venture that you don't have
passion for, something that does not make you jump out of bed each morning, it
will be very hard to put in the hours and energy to make it successful - thus
not a perfect business idea.
3. Understand
Your Competition
Every business has competition -
either direct or indirect. Think about movie theaters. They have direct
competition from video rental stores or at home television. They also have
indirect competition from any other activity that consumers spend their
disposable income on like bowling, paint ball, golf, etc. Anything that people
do in their spare time.
Further, some competitors are
ruthless. Meaning that if you promote and offer a product that is similar to
theirs but at a lower price, these competitors will just lower their price to
match or beat you. If they are already established businesses - they may be
able to undercut your price enough to drive you out of business.
If you don't know your competition -
what they are willing to do to keep you out of their market - you may be
spending more of your time in a pricing war then growing your business - not
the perfect business idea.
4. Cash
Flow
Lots of entrepreneurs enter the
business world with great ideas but very poor understanding of the capital it
will take to get their venture off the ground. Most will prototype their
product or service and understand what it takes to make the product or provide
the service but they don't understand the capital it takes to manage the rest
of the organization - including marketing (very expensive but extremely
necessary), employees (more than just salaries or wages), insurance or supplies
and all the little miscellaneous expenses that add up very quickly like phone,
internet, computer services, etc. Knowing your total cash flow will help ensure
that all of your costs (variable and fixed) can be covered by the business -
the perfect business idea. I have seen way too many businesses with great
products fail because they could not cover simple expenses like rent or
utilities.
5. You
Know who you are. Know your
strengths and weaknesses. Know that you are ready, willing and able to do what
it takes to make your venture a success. I have worked with many business
owners in the past that think all they have to do is hang out their shingle and
they have it made. Thus, when it comes down to actually running the business
day-to-day - they are unwilling to invest the time, energy or money necessary
for success. Thus, know how hard you are willing to work.
Moreover, know your personal
financial situation and what you need the business to generate to cover your
lifestyle. If you think your business will pay you a great salary from day one
- it will not. And, if you need it to, it is not the perfect business idea for
you. Take away outside distractions like your personal financial situation -
get those in order - thus, when your business concept does materialize - you
will be able to solely focus on its conception and growth. In the end providing
you the financial security you are seeking - it will be the perfect business
idea.
Regardless of the level of your
desire for your business - a lifestyle mom and pop operation or a
multi-national conglomerate - if you develop a business idea with these five
concepts in mind - your idea will be the perfect business idea for you.
REFERENCES
Olukunmi
Ogunbitan (2001) easy to understand economics.
O.A
Longe (1999) Essential Commerce.
Sullivan,
Arthur, Steven M. Sheffrin (2003). Economics; principles
in action.
Vikramaditya
S. Khanna. The Economics History of the corporate
form in ancient india.
Scottplollack/2012/2013
what exactly is business development.
Sorensen,
Hans Eibe (2012). Business Development: A Market-
oriented prerspective. John Wiley
and Sons.
Thorstein
Bunde Veblew (2010) Theory of the leisure class.
Okafor
and Ama Udu, Essentials of Business Management (Edited)
(2002).
The
Nigerian Economy: 1960 – 1999. Jc Anyanwu et al.
The
Economics of Development and Planning. M.L Jhingan.
Economics
for a developing world. Michael P.Todaro (Revised
Edition) 1996.