Which factors should kept in view of Businessman before Starting the Business or Prerequisites of a Business
Following are the prerequisites of a successful business :
1. Market Condition :-
First of all businessman keeps in view the demand of the goods which he wants to produce and keeps in view his own skill and experience. If the demand is inelastic then chances of success are bright.
2. Availability of Capital :-
Capital is considered an important factor in the business. It is required for the purchase of land, machines, wages and for raw material. A businessman has to decide before starting the business that how much capital he can arrange.
3. Scale of Production :-
Before starting the business a businessman also decides that he has to produce the goods on small scale or large scale. He makes the decision keeping in view the availability of capital and demand of the goods.
4. Form of Organization :-
A businessman also to decide about the form of organization. He may start the business as a sole proprietor or as a partnership or in the form of joint stock company.
5. Selection of Location :-
A businessman select the place for business keeping in view the availability of raw material cheap labour and transportation. If these things are easily available then he will start the business there.
6. Government Policy :-
The attitude of the Govt,. towards the business is also considered by the businessman. If Govt. is encouraging the business then it will be profitable for the businessman.
7. Govt. Concessions :-
Sometimes Govt. provides loan on low rate of interest to particular industries. Sometimes tax holiday is provided in particular areas. So a businessman also considers the Govt. concessions before starting the business.
8. Availability of Raw Material :-
A businessman should also keep in view the availability of raw material. If it is imported from the other countries then it may create problems for him.
9. Availability of Labour :-
Before starting the business, a businessman should also consider the availability of labour. If skilled and efficient labour is not available then business will not be profitable.
10. Availability of Machines :-
A businessman should also examine that machines required for the business are available in side the country or not. If these will be imported then Govt. will provide the foreign exchange or not.
11. Means of Transportation and Communication :-
If the means of transportation are quick and cheap then cost of production will be low and rate of profit will be high. The expansion of the market also depends upon the quick and cheap means of production.
12. Administrative Conditions :-
The success of business depends upon the administration. If the administration is efficient and capable then rate of profit will be high in the business. So a businessman should pay proper attention to the administrative aspect of the business.
13. Formulation of Business Policy :-
A businessman also frames the policy about the methods of payments, receipts and techniques of production. These are very essential for the successful business.