{"id":948,"date":"2015-05-06T20:56:42","date_gmt":"2015-05-06T20:56:42","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterybusiness1xngcxmaster\/?post_type=chapter&p=948"},"modified":"2019-01-05T01:41:37","modified_gmt":"2019-01-05T01:41:37","slug":"reading-important-considerations","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wmintrobusiness\/chapter\/reading-important-considerations\/","title":{"raw":"Reading: Important Considerations","rendered":"Reading: Important Considerations"},"content":{"raw":"\"Photo<\/a>\r\n\r\nThe entrepreneur's challenge is to balance decisiveness with caution\u2014to be a person capable of seizing an opportunity but also one who has done enough preparatory work to be well informed and not assume unnecessary risk. Preparatory work includes evaluating the market opportunity, developing the product or service, preparing a good business plan, figuring out how much capital is needed, and making arrangements to obtain that capital.\r\n\r\nEconomists have analyzed a range of entrepreneurial successes and failures and identified key issues\u00a0for up-and-coming business owners to consider carefully ahead of time. Taking them into account can reduce risk; ignoring them can contribute\u00a0to failure. If you're considering entrepreneurship, ask yourself the following\u00a0questions to make sure you\u2019re thinking about the key business decisions:\r\n\r\nMotivation<\/b>: What is your\u00a0incentive for starting a business? Is it money alone? Are you prepared to spend the time and money needed to get your\u00a0business started? True, many entrepreneurs acquire\u00a0great wealth. However, money is almost always tight in the start-up and early phases of a new business. Many entrepreneurs don't even take a salary until they can do so and still leave the firm with a positive cash flow.\r\n\r\nStrategy<\/b>: What products or services will your\u00a0business provide? What differentiates your\u00a0business idea and the products or services you will provide from others in the market? Who is your\u00a0ideal customer? Who is your\u00a0competition? Is the plan to compete solely on the basis of selling price? Price is important, but most economists agree that it's extremely risky to compete on price alone. Large firms that produce huge quantities have the advantage in lowering costs.\u00a0It's also important to decide how you plan to manage and advertise your business.\r\n\r\nRealistic vision<\/b>: What kind of business do you want, and how much will it cost to get started? Will you need a loan? Is there a realistic vision of the enterprise's potential? How long will it take to make your\u00a0product or service available? How long until you start making a profit? Insufficient operating funds are the cause of many business failures. Entrepreneurs often underestimate start-up costs and overestimate sales revenues in their business plans. Some analysts advise adding 50 percent to final cost estimates and reducing sales projections. Only then can the entrepreneur examine cash-flow projections and decide if he or she is ready to launch a new business.\r\n\r\nOther Key Decisions and Planning<\/strong>\r\n\r\nExperts can help with many decisions on financing, taxes, insurance, location analysis, or supplier relationships. Some bankers and insurance agents will give advice at no\u00a0charge to encourage a relationship. There are even experts to help with planning itself!\r\n\r\nThere is no right or wrong way\u00a0to answer these questions or do the planning. Rather, the answers and approach will be based on each entrepreneur's judgment. An entrepreneur gathers as much information and advice as possible before making these and other crucial decisions.\r\n\r\n ","rendered":"

\"Photo<\/a><\/p>\n

The entrepreneur’s challenge is to balance decisiveness with caution\u2014to be a person capable of seizing an opportunity but also one who has done enough preparatory work to be well informed and not assume unnecessary risk. Preparatory work includes evaluating the market opportunity, developing the product or service, preparing a good business plan, figuring out how much capital is needed, and making arrangements to obtain that capital.<\/p>\n

Economists have analyzed a range of entrepreneurial successes and failures and identified key issues\u00a0for up-and-coming business owners to consider carefully ahead of time. Taking them into account can reduce risk; ignoring them can contribute\u00a0to failure. If you’re considering entrepreneurship, ask yourself the following\u00a0questions to make sure you\u2019re thinking about the key business decisions:<\/p>\n

Motivation<\/b>: What is your\u00a0incentive for starting a business? Is it money alone? Are you prepared to spend the time and money needed to get your\u00a0business started? True, many entrepreneurs acquire\u00a0great wealth. However, money is almost always tight in the start-up and early phases of a new business. Many entrepreneurs don’t even take a salary until they can do so and still leave the firm with a positive cash flow.<\/p>\n

Strategy<\/b>: What products or services will your\u00a0business provide? What differentiates your\u00a0business idea and the products or services you will provide from others in the market? Who is your\u00a0ideal customer? Who is your\u00a0competition? Is the plan to compete solely on the basis of selling price? Price is important, but most economists agree that it’s extremely risky to compete on price alone. Large firms that produce huge quantities have the advantage in lowering costs.\u00a0It’s also important to decide how you plan to manage and advertise your business.<\/p>\n

Realistic vision<\/b>: What kind of business do you want, and how much will it cost to get started? Will you need a loan? Is there a realistic vision of the enterprise’s potential? How long will it take to make your\u00a0product or service available? How long until you start making a profit? Insufficient operating funds are the cause of many business failures. Entrepreneurs often underestimate start-up costs and overestimate sales revenues in their business plans. Some analysts advise adding 50 percent to final cost estimates and reducing sales projections. Only then can the entrepreneur examine cash-flow projections and decide if he or she is ready to launch a new business.<\/p>\n

Other Key Decisions and Planning<\/strong><\/p>\n

Experts can help with many decisions on financing, taxes, insurance, location analysis, or supplier relationships. Some bankers and insurance agents will give advice at no\u00a0charge to encourage a relationship. There are even experts to help with planning itself!<\/p>\n

There is no right or wrong way\u00a0to answer these questions or do the planning. Rather, the answers and approach will be based on each entrepreneur’s judgment. An entrepreneur gathers as much information and advice as possible before making these and other crucial decisions.<\/p>\n

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