What to consider before starting a business - Part 2

FACTORS TO CONSIDER BEFORE STARTING A BUSINESS

Risk and Reward

Risk in business means the probability to make loss or profit while reward is the profit gained from the business. In every business, there is always a risk that is, the chance of making profit or loss. ..

But a reasonable business man should be able to analyze the percentage of the risk and reward. One can easily predict risk by studying the economy at that moment, the community, the government and most especially the demands and supply of what he or she is planning to invest on.

If at the end of the analysis, the risk of the business is bearable then one can further the process of the business but if the risk is not favorable, he or she should stop the processing of the business to avoide loss and then change plans or find something else to invest on and make sure that the new business is favorable before investing on it.

Available Capital

One should understand that money is the root of a business. He or she should calculate the estimated amount that will be needed through out the business and compare it with the money available on ground for the business.

The business is good to start if the money available will be enough through out the business and the business should be canceled if there is no availability of money to run it.

Though some business mans take risks to start their business with any amount they have on ground as at that time but its very risk and a game of chance and luck because the time the business will need more money, there might be no money with the business man and that alone can run down the business and result in loss.

In the casa of low capital, the best solution is to wait till you have enough capital or find another form of business that requires low capital and invest in it.

Weather And Climate Condition

Weather means condition of atmosphere of a place for a short period of time while climate is the atmospheric condition of a place over a long period of time. Weather and climate conditions affects the rate at which business yield.

For instance, a business that involves the production of umbrella, cardigan, sweater, etc. will definitely have more sales during the raining season than the dry season because those materials are majorly used in the raining season and therefore the demand will increase during that period.

So therefore, any one planing to invest on a particular product should check the product to be produced in relation to the weather and climate condition of his or her area at that particular time.

He or she is good to go if it the business will yield income while he or she should consider investing in another thing if it is not favorable enough to generate profit for him or her.

Source

Peoples Review About The Business

One should try to learn from peoples views about the business before starting. It can never be possible to be the first person to start a business.

A lot if people already did and have their reviews about the business. A new business man should approach the previous business man either physically or online to ask about their review on the business and their suggestion, advice and guidelines to follow through out the business.

If their review is very good and interested, you are good to start the business but if in other way round, one should back off to avoid loss.

The Ratio Of Profit To Stress

A good business man or woman should estimate the percentage of profit to be generated and the stress involved through out the business because some business requires much stress and at the end of the business, makes little profit.

If the expected income covers the stress to undergo throughout the business, the business can be done but if the stress is much more compare to the expected profit, then such business is not advisable to avoid loss.

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