Factors To Consider Before Starting a Profitable Business

 You want to start a business? I know that it's good to start your business. But, I'm convinced that it's better to start and run a more profitable business.

Therefore, it's good to know what is important before starting that thriving business.

Below is a list of these factors;

a) A good Business Idea

A good business idea is the core of any given business. With a good business idea, you'll be able to understand what you're offering and what's needed for the business to kick off. 

b) An Elaborate Market Research

After having a good business idea on the board, it's important to carry out a market research to find out what your target consumers want. 

Target consumers' needs may be based on factors like age and gender.

Conducting an elaborate market research ensures that you come up with a business that will satisfy these consumers' needs. And hence, a thriving business.

c) Relative Business Location

A good business will be located either, near the consumers or near the raw materials. 

Here, your choice greatly depends on transportation costs.

For example, a cement manufacturing company may decide to locate it near its raw materials because the cost of transporting the raw materials is more expensive compared to that of manufactured cement.

d) Affordable Capital Estimates

Considering capital estimates that you can afford ensures that you're running a business that you can easily manage. 

Even though you can apply for a loan, it's important to do it within your affordability.

e) Legal Formalities

When starting a business, it's very crucial to consider acquiring the legal business documents like business permits and tax documents.

This convinces your customers that whatever you're offering is in line with the law. And therefore, your business draws in more consumers.

f) A Productive Staff

Starting a business with a dedicated and productive team ensures the success of the business. 

For instance, a good staff will know how to handle both the goods/services and the customers.

g) Expected Risks

Before starting a business, it's necessary to list the risks you expect to encounter. This keeps you prepared always.

Types Of Business Activities You Should Know

 Business is a diverse field. It's not just about buying and selling goods, but a wide range of activities.

Some of the types of business activities you have to know include;

a) Trade

Trade is the exchange (buying and selling) of goods for other goods or for money.

This is the widely known business activity. 

Sometimes, people tend to think that business is just trading. 

b) Processing

To process is to change the raw form of a material without adding other components.

For example, grinding maize into maize flour.

c) Manufacturing

This is combining different raw materials to come up with a final product.

Cement and chemicals are good examples of manufactured goods.

d) Extraction

Extraction is a business activity that involves getting goods from their natural environment.

Examples of extraction include; mining, quarrying and fishing.

e) Provision of Services

A service is primarily, a thing done by someone/party to benefit other people/parties.

Examples of services are health and insurance services.

f) Construction

This include activities like road and bridge construction.

g) Distribution Activities 

These are the activities that involve moving of goods from where they are produced to where they are needed. 

Retailers and wholesalers are good examples of distributors. 

Also read;

Factors To Consider Before Starting a Profitable Business

What is Business?

 Definition of Business 

Everyday, we hear of business. But have you ever asked yourself what business really is? If yes, then we've got you answered.

Business is any economic activity that involves the exchange (buying and selling) and production of goods and services with a particular purpose.

Reasons for Starting a Business 

Before starting any business, it's important to find out why you want to start the business. Therefore, different people start business with varied reasons and aims.

Some of these reasons for starting a business are;

a) To make profits- This is one of the main reasons for starting business. Whichever business it is, the owner aims at making profits. Profits are important for they ensure the continuity and expansion of a business. 

b) To provide goods and services- Business exists because of the provision of goods and services. Hence, before starting a business, one has to bear in mind that the whole scheme is about providing goods and services to consumers.

c) To create employment- some people venture into business inorder to create employment opportunities for others or even themselves.

d) To be an own boss- It's obvious that some people may dislike jobs managed by other people due to different reasons. Maybe due to low pays or generally unfavorable working conditions. Therefore, individuals decide to start their own businesses to feel comfortable and manage their own source of income.

e) To invest their surplus- Some people decide to venture into business inorder to invest their surplus resources. Take for example, when you have extra bags of maize but don't want them to go bad. The best you can do is to start selling the extra bags. That's business.

f) To pursue one's passion and hobbies-  Different people have different hobbies. Some decide to invest on these hobbies for business. For example, Rachael who likes knitting for leisure, may decide to start knitting sweaters and selling them.