1. Deciding on a business
To set up a successful business an entrepreneur must have guts, brains and capitals. For an
entrepreneur instinct is an important thing, because he will take decisions more and more times. At
the beginning, an entrepreneur must decide about important question, such as which business is best
for me? When I will locate my business? If you want to be an entrepreneur, you will love your
intended business, because it will full almost 12 hours in your day.
To start a business more than scholastic achievements are required: it takes prudence, working
knowledge, experience and attention to details. Often, your own capital is not enough to start an
enterprise, so you will be able to obtain capital from banks or third persons and to forecast future
cash flow with cash flow control. Start by themselves is a good solution, because in this way an
entrepreneur can control the risk by placing a limit on money to invest.
You can decide to operate a full timer or a moonlight business. A moonlight business is a business
you start in hours you are not busy with your current job. It may be a good choice for people who
want their own business, but are afraid to leave their current job. Strategy is important in business:
you must evaluate if your potential business may be successful and if you will have good earnings.
Is important to choose a business which will grow in today and in tomorrow market, avoiding
commodities businesses or businesses were you must compete entirely on price, because a start up
enterprise cannot compete with large and successful competitor in this kind of business.
2. The Business Plan
Is useful to write a business plan. A BP is a written prospect which evaluate if you can really make
earnings with your business. It is a very important tool in every kind and size of business. Coping a
BP already done by another business is not a good idea, because each business has its own strength
and weakness and is different from others. You should write your BP by yourself, and you may
show it to your family and friends for opinions, but to your attorney and banker too, to obtain a
technical view. BP is also useful to obtain advice from people who worked in the same field of
business. A BP can be used to focus your objective and to organize information. It can be also used
as tool in important relationships, including investors, banks and other stakeholders.
5. Business Organization
Having a partner: pros
 A partner can help the entrepreneur with decisions
 The entrepreneur not needs to stay at work at all times: a partner is useful to share the load
of work
 A partner will have complementary skills
 Having a partner is necessary to share the risk and, eventually, losses. A partner is useful
also to contribute capital.
Cons:
 The entrepreneur will have to share profits and rewards if his business is successful
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The entrepreneur can’t decide by himself
A partner can give a bad advise
Having a partner generates problem such as lawsuits and more costs, such as a buy-sell
agreement in case of a disagreement or death of partner.
Types of Business Organization
o Sole proprietorship  one person, unlimited liability, income or loss from the business are
reported in his personal income tax return
o General Partnership  more partners, unlimited liability, income is reported on a separate
income tax return (but partners than report their share profit on their personal tax returns)
o Limited Partnership  general partners with unlimited liability, limited partners with
liability limited only to the capital they have invested into the business
o Corporation  limited liability (creditors can look only to business’s assets), the
corporation has its own income tax return and pays taxes on its income
Laws: income tax returns, franchise tax returns, employment tax returns, unemployment tax returns.
Professional help:
Attorney: draws partnership agreement, help advise on the best form of ownership for the
chosen business, assist in negotiation to buy an existent business,
Accountant: determines the best form of ownership, helps to set up the records and books of
the business, prepare financial statements and determines profitability.
Payroll service provider: a start up entrepreneur can outsource all about his human resources
department to these professionals. This kind of professionals is useful to outsource the
payment of taxes, avoiding to make mistakes.
Pension plan manager: cures the pension plan of the entrepreneur and his employees.
Pre-employment screening service: its function is to search for potential employees for a
start up business.
8. Communication tools
There are two types of communication: external communication to reach new customers using
brochures, telephone calls and various forms of advertising; internal communication is made in
order to attract talented employees. The key to have an excellent staff is to motivate employees with
rewards, newsletters, meetings etc.
Basic communication tools
Mail: is used to send secure documents
Landline telephone is useful for business: is important to have separate lines for business phone
and personal phone and is indispensable to have the capability to take messages if nobody can
answer.
Cell phones: is used for mobile communications. Is helpful when the entrepreneur or his managers
are not at office. It is important to choose the telephone plan which has the characteristics that
match the needs of entrepreneur.
Smartphones: are practically small computers with telephone function. They allow to surf the
Internet and send e-mails and have smart functions such as GPS, e-book reader etc.
Web conferencing: allows people who are very distant to communicate as they were face to face.
Social networks: are useful to advertise product and services in a cheap way.
Fax machines: allow to send faxes (stand alone machines or all in one)
Computers: is a key tool. It is composed of

processing unit, either a PC or a Macintosh. This last is better than pc for particular
applications, such as graphic arts tools.
 flat monitor, cd/dvd drive and USB ports.
 Printer and backup storage
 Antivirus program
Laptops, notebooks and netbooks are particular portable computers. They are useful for business
travels or when managers or employee are not at office. They can be connected on internet, but
netbooks has smaller memory and their functions cannot be upgrade (HD, Ram, Video or audio
board). Tablet computers are small and light computer which can fit in a hand. They are equipped
with a touch screen for easy navigation everywhere. They however have high cost and are more
fragile.
Computers works with some software. For a basic use, a Pc will have the capability to do word
processing, spreadsheets, and presentations. Most popular tool for these is Microsoft office, which
contains useful software such as word, excel, power point, publisher and access. There are also
auxiliary products such as webcams, all in one printers, scanners, external backups etc.
10. Location and Leasing
The first step in business is choosing where your business will be located and where you will live.
You may select an area where you like living and working, because you will spend a lot of your
time there. The second step is dealing with the planning department at City Hall which will approve
your plans.
Each business has its own particularity, but there are some information useful for every kind of
business. For example demographic data will provide information about the population, age,
income level or race. Customers must be able to see your location easily: a location on the corner of
the street is the best, but the rent for those spaces is expensive. Parking is also an important factor of
success and the proximity to a successful business (not a competitor!)such as a Mc Donald’s
restaurant may be profitable.
To assist you in negotiating your lease or purchase, a real estate lawyer is indispensable. Is
important to obtain a short term lease, because your business may not be successful at your first
location, or you may need more space to expand your business in case of a rapid success. In that
way is easier to move to another location. Judge a location entirely on rent is a big mistake, because
an expensive rent may indicate also a profitable location.
12. E-commerce
E-commerce is useful for a beginner entrepreneur. It is the sale of services and product via internet.
E-commerce is a potent tool, because allows to reach potential customers all over the world with
minimal costs. If you think that more than 1,6 billion people use internet at least once a month, you
can understand how e-commerce can improve your earnings quickly. You can obtain success in
your business by reaching via Internet customers who don’t have access to some product in their
own city: for example you can sell bananas in Iceland! However e-commerce is not concretely
applicable in every businesses, because often you must compete with large competitors which have
powerful delivery and marketing systems, so they can deliver their goods quickly and cheaply than
you. You can have your web site and add an e-commerce solution into it, or you can use an ecommerce service provided by online sites such as e-bay, yahoo, amazon etc. This second way is
indicate for entrepreneurs who don’t have experience with web and this kind of solution allow them
to save time and money. For web payments there are some tools such as Pay-pal and Google
Checkout which are very safe and easy to use.
If you want to create your own website, you must have a domain name. A domain name is a unique
name that identifies a single computer on the Internet. To develop a website you need also space on
web: you can decide to buy it, but usually people lease hosting space from specialized companies.
To create a website you need a specialist skilled in web design to avoid problems of navigations,
such as broken links. Before Hiring a web site developer you may consider opinions of others
entrepreneurs which have engaged him, and you must look at other websites he has created, because
a website is an important showcase for your business. Your website will be easy to use and the
contents must be useful for the customer. Feedback via e-mail is also a good tool to observe errors
and improve your site.
13. Opening and Marketing
Marketing is important to make a business known in the market. For a newborn business the best
way to be known is copying successful marketing plans proven by most successful competitors. An
enterprise should learn all about its customers. Supplying is also a key function for a business: an
entrepreneur can outsource the production of one or more of his products, obtaining less expenses
and more time in order to concentrate on marketing.
How to buy: an entrepreneur should buy only products and goods which he can sell. Loyalty to
good suppliers is fundamental to obtain discounts and deferred payment in case of necessity. The
control of cash flow is important to avoid insolvency.
Marketing tools: a good name is a key factor of success. The name will be easy to remember and
simple to pronounce. It will be unambiguous and it will represent what really the enterprise do. The
logo is the image of the enterprise. It can be used on brochures, web site, gift boxes etc.
Advertising: it can be made in different ways and with different media. An enterprise can be
advertised on radio, TV, on internet, on yellow pages by newspapers, magazines etc. It is difficult to
find new customers. For this an entrepreneur can use Direct mail, sending e-mails to some specified
customers with specific characteristics, who can be interested in product.
15. Expanding and handling problems
When your business has started and is stable, you can start planning its growth. Only if you are
involved in all the functions of your starting business you can detect and correct weakness early,
avoiding big losses. It’s also good to be personally involved in more details of your business
because in that way nobody can take advantage of your ignorance and nobody will spoof you.
When your business grow, you will have systems to prevent employee theft. Your large and
successful competitors have surely developed an efficient loss-prevention system, so you can
implement it in your business, with the opportune corrections. Self –confidence and haste are
enemies of the growth. Often are overconfident in themselves and in their products or services and
are eager to grow, but a starting business with one problem will be a grown business with many
problems. An expanding business will need skillful persons to whom delegate responsibility and
authority. Each manager will handle his own profit center with its own profit and loss statement.
To empower your employees you must motivate them with rewards and recognition and each
manager will be responsible only for the things he do and for his goals. The delegation mechanism
is inevitable in large business, but the entrepreneur will always have to decide about capital
expenditures and he will be the only person who sign checks.
Problems
There are common mistakes made when a business start to expand. An uncontrolled cash flow is
one of the most common cause of failure. To avoid to fail as fast as you started you must be prudent
with cash flow accounting and you will forecast very low income and very high costs. If your sales
flop down you must quickly cut your costs, but you will never cut quality of the products. To avoid
big losses, the key is to identify and face the problems with honesty and in time. When you are in a
bad financial situation you will explain to your creditors what your problem are and, if it is
necessary, you will ask for a deferred payment. You can also face the crisis by increasing your
sales, improving your performance and your image using advertising.