4. Setting up a business

Many large businesses in the UK are public limited companies (plc), which means that the public can buy and sell their shares on the stock exchange. The minimum share capital for a public limited company is £50000, so many new businesses are likely to take one of the following forms.

Sole trader or Sole Proprietor (UK) is the simplest way of starting a business. An entrepreneur is self-employed and entirely responsible for all aspects of the management of his or her business.

Another form of business is a partnership when two or more people starting a business together. All partners are responsible for the debts of the partnership, and the profits and losses are shared between them.

Private Limited Company can be formed with a minimum of two people becoming its shareholders. They must appoint a director and a company secretary. If the company goes out of the business, the responsibility of each shareholder is limited to the amount that they have contributed; they have limited liability. Such a company has Ltd (Limited) after its name.

In the US businesses take the same basic forms. However American companies are registered or incorporated with the authorities in the state where they have their headquarters. The abbreviations Inc and Corp refer to such companies. To sell shares to the public they must apply to the Securities Exchange Commission.

To be a successful entrepreneur means to be an idea man when there are innovations in business on the first place. For example Andrew Clein who founded his company in 1993 with the idea of bringing a Belgian beer to the American market. He was one of the first to understand the advantage of using the Internet as a means to attract investment capital for new business venture.

The necessary qualities to become the director of a successful business are a strong sense of leadership, ability to organize and motivate, and also purposefulness.

There are some stages in starting the company. The first one is to identify the problem and market. The next stage is to get an idea of the product or service, then to conduct a feasibility study. One of the main stages is to create the company and to invite private investors to join the project. Then it’s important to seek investment from major companies. The last stage is to construct the assembly plant.

Setting up a successful business requires careful preparation and planning but also involves a degree of risk-taking. There are a number of questions that all entrepreneurs must ask themselves concerning the products or services that they intend to sell, the competition that they will face, the structure of a business itself and the sources of finance that they will need to open their new venture. This means that all of these parameters must be defined in a business plan: a document that shows how the entrepreneur will organise his or her business, how much he or she expects to sell and where the capital will come from. Once this information has been put down on paper, the entrepreneur can then choose an appropriate form for the company, register it with the authorities and open for business.

Business plan includes details of the business such as name and type of business, also personal details, number of people and their functions. One of the main parts of business plan is a market. It includes describing a market, potential customers, condition of market growing, main competitors and advantages of the product or services over the competition. Next it’s necessary to mention what sort of marketing or advertising will be intended. Then there are premises, machinery and vehicles appointed. Finally and mainly point is what objectives had for the business.

Only after such careful preparation it’s possible to start a business.