Theories used when setting up a new business Essay Example for Free

Theories used when setting up a new blood line EssayWhen setting up a new trading many duty theories have to be considered and thought about. To enable a successful logical argument set up, many features mustinessiness be pre mean and thought over carefully. These features are such as Business plan money flow forecast Break- compensate figure Entrepreneur skills Business reasons why set up the production line? succeeder how entrust they succeed in the market? Finance where testament it come from? Government how endure they dish? Setting up how result they set up the business? Who go away run the business? each(prenominal) of the above 10 business theories are springy and must be considered and thought out carefully in order for business success. Businesss that start up without consideration of the above are less belike to survive in their market than those who are set up properly with all the above theories planned and worked out. The listed theories will need to be developed and will each contain high levels of detail. It is therefore needed for me to know exactly what information will be required for when applying these theories to my business proposal planning.Theories Explained Business computer programme The business for which I am planning and making a proposal for will need a business plan. This will state the company name, where it will be (planned to be) situated, its aims and objectives, what type of business it will be and other important information about the company. Cash Flow Forecast The business will besides need this document which will state a general figure of the estimated figures of the amount of money that will be needed to be spent for various matters for a disposed time peak.This is so that it can be seen when cash will be short so that appropriate loans can be taken. Break-Even The business will require funding and money invested into it before it can begin trading/operating. For this money to be redeem ed the amount spent/invested firstly has to be gained back in the form of revenue. The break even point is when the total amount of revenue equals the total amount of money spent. After this point, the revenue will be profit. Entrepreneur Skills The entrepreneur creates the business idea, and then hires others to carry out the activity.The may alike longing to invest some of their personnel money in hope to gain profit out of the business after establishment. They will need skills to ensure that they make the right plans, and hire the right people/organizations to serving them. Any wrong actions taken can lead to failure of the business. Reasons to set up There has to be some reasons as to why a business should be started. Many people start business because they want to be their own boss, they want full control over everything, they want a tonal start, and they have lavish experience and want to run their own business.Success Before setting up the business, a strategy must be a vailable to help celebrate the business stable and in the market. Once this is ensured the businessperson needs to make a strategy to help the business succeed in its aims and objectives. Its aims are most likely to be to survive, break-even, make profit, gain/increase market share etc. Finance Before the business can start operating it needs some finance. Money will be required to establish the business as well as keep it going.Finance will be required to buy stock, advertise the business, hire staff etc. Also if the business wishes to be a limited company, then the procedure also costs. Usually a bank loan or personnel investment by the businessperson is used however shareholders can also invest into the business. It is vital to know how much money is required to establish the business and keeps it going for a certain period of time so that adequate loans/investments can take place. Government Sometimes the government can also provide support for a new business.The government m ay get involved for one of 3 reasons to control areas of high business congestion, encourage firms to locate in high unemployment areas, or to attract foreign business to UK. The government does this with various schemes such as enterprise zones where taxes are exempt (for a given period) in order to attract business into the area. Setting Up Before setting up the business the businessperson needs to know and take root how they are going to set up the business. Therefore, they would need a business idea, business plan etc.When setting up they can then either decide to set up on their own by taking a loan or place their personnel money, or setting up the business with a partner. Running the Business The businessperson must also understand what is required for running a business. He must have adequate staff, enough money to buy stock and pay staff, enough stock to sell, business/product advertising etc. The businessperson must have enough resources (Land, Labour and Capital) to mee t all the above needs to keep the business running smoothly.