The Business Creation Process
The business creation process begins with an idea. It is followed by a series of steps, including market research, drawing up financial forecasts and choosing the legal form for your company.
Entrepreneurship is a way of life for many people and offers autonomy, satisfaction, and personal wealth that cannot be easily replicated through employment. It is also an economic activity that creates jobs, improves productivity, and helps develop new economic sectors. However, it is a risky enterprise that requires major investments in time and money. Only about two-fifths of start-ups become profitable. Policy makers therefore want to stimulate business creation while reducing its social costs.
Small businesses that serve local markets are a typical example of business creation. Their owners often invest their own money, turning a profit that serves as their income, and they usually don’t take any outside investment.
Often, entrepreneurs are inspired by a specific need in society that can be fulfilled with a unique business idea. They may then identify potential customers and competitors. Competitor research is useful in finding out what needs the competitors are filling in the market, which may be an opportunity for the entrepreneur to explore in his or her own business concept.
Successful entrepreneurs are those who can add value to a problem or pain point. One famous example is when two men paired $8,000 in savings with their skills learned through an ice cream-making correspondence course and opened Ben & Jerry’s in Burlington, Vermont. Today, this is a multibillion-dollar corporation.