Section 1.2 Types of Organization

Start-up Businesses (Day 1)

What is required to start a business? Start-up costs include: Premises (rental or mortgage deposits) Buildings Capital equipment Legal and professional fees Marketing costs

Start-up costs include:

Premises (rental or mortgage deposits)

Buildings

Capital equipment

Legal and professional fees

Marketing costs

What factors must be considered? Business idea Finance Human Resources Entrepreneurial skills Fixed assets Suppliers Customers Marketing Legalities

What are the reasons to set up a business? To GET CASH: G rowth E arnings T ransference and inheritance C hallenge A utonomy S ecurity H obbies

To GET CASH:

G rowth

E arnings

T ransference and inheritance

C hallenge

A utonomy

S ecurity

H obbies

How are market opportunities identified? Gaps in the market  create a a market niche Innovative ideas and creations; new inventions Developing the entrepreneur’s personal qualities and skills; expanding upon hobbies and special interests

Gaps in the market  create a a market niche

Innovative ideas and creations; new inventions

Developing the entrepreneur’s personal qualities and skills; expanding upon hobbies and special interests

What possible problems are faced by start-ups? Lack of finance capital Cash flow problems Marketing problems Un-established customer base People management problems Legalities Production problems High costs of production Poor location External influences

Lack of finance capital

Cash flow problems

Marketing problems

Un-established customer base

People management problems

Legalities

Production problems

High costs of production

Poor location

External influences