We all work hard to earn a living. Since childhood we have been told that to live a good life, we need to be financially stable. To make a living, starting a business is the ultimate solution. The spectrum of business is broad and you can do anything you want. All you need is knowledge of the market and motivation to start a business. Here in this blog, we will discuss various aspects of business and how to start a profitable one.
1. What is a Business?
Business is an activity of earning money by producing, buying or selling products, goods and services. It can also be defined as an act of engaging in a commercial, industrial or professional activity by an enterprising entity or an organisation. The main goal of a business is to generate profits.
2. Understanding a Business
Before opening a business, we need to understand and consider several factors. A few of those are:
- On what scale are you planning to do your business?
- What is the medium of your business?
- Identifying target customers
- Market demand of the products or services you are offering
- Type of business structure you will have
For a better understanding of a business, the above factors should be considered.
3. Types of Businesses
For the smooth running of a business, the type of business should be chosen wisely. The type of business you choose affects your taxes, liabilities and even the profit you make. Thus, to start a business, each type should be chosen after proper research.
A few of the significant business types are:
- Sole proprietorship – In this type of business, only a single person or a married couple is responsible for debts and profits. Here, you have absolute ownership and authority to make all decisions.
- Partnership – This type of business is good for those who are planning to start their business in partnership with multiple people.
A partnership is of two types:
- General partnership – Here, the partners are responsible for either profit or loss.
- Limited partnership – Here, the partners are like investors and are not liable for debts.
- Corporation – A corporation is an entity whose aim is to gain profits and is created by stockholders, individuals and shareholders. The corporation is of four types:
- C Corporation – In this the owners receive profits and are taxed at an individual level.
- S Corporation – This type of corporation has tax benefits along with liability protection.
- B Corporation – It is also called a benefit corporation. They are taxed similarly as C is profit-oriented.
- Non-profit – It is commonly used by charitable, religious and educational organisations. They don’t focus on profit generation and are intended for public welfare.
- Limited liability company (LLC) – Here, the owners, partners and shareholders have limited personal liabilities. There are no limitations of shareholders in it.
4. Business Sizes: the scale of business operations
Businesses are classified in terms of their size. The size of a business can be based on the number of employees working in that business and its annual turnover. In terms of size, businesses are classified into four categories:
- Micro Size – Under this, investment up to 10 million is done. It involves a turnover of 50 million. It has less than 10 employees working for it.
- Small Size – Under this, investment up to 100 million is done. It involves a turnover of 500 million. It has less than 50 employees working for it.
- Medium Size – Under this, investment up to 200 million is done. It involves a turnover of 1 billion. It has less than 250 employees working for it.
- Large Size – Under this, an investment of over 200 million is done. It involves a turnover of over 1 billion. Over 250 employees are involved in it.
5. Types of Business Industries
Every business belongs to a specific industry based on the products or services you offer. An industry is a set of companies that are related to primary business activity.
Today, there are several industries which one can choose to be a part of as per their interest. A few of the major business industries are:
- Health Care
6. Examples of types of Businesses
Millions globally have various types of businesses but there are few who know how to do it the right way. So we shall discuss a few examples of businesses that have not only generated profits but also made an impact in the global market.
Coca-Cola is one of the most popular beverage companies in the world. It has had an impact in over 200 countries. It is one of the most successful beverage selling companies which performs well in the stock market too.
Reliance Industries Ltd. is another example of a successful business. They have always performed well in the stock market and their profit ratio is also high.
During the pandemic, the healthcare industry saw a tremendous hike as the demand for healthcare products increased in a short time. Many sanitizer manufacturing companies gained a lot of profit because of the increase in demand for sanitizers.
7. How Do You Start a Business?
Starting a business is always a big deal for anyone. But to do this, you need to follow the following steps:
- Conduct market research – A well-conducted market research will help you grow your business successfully
- Make a business plan – Having a business plan is important as it will decide how you will run and grow your business
- Choose the structure of your business – This decision will impact your business registration, the way you pay taxes and what your liabilities will be
- Licenses and permits – Once you decide the name of your business, you need to apply for the required licenses and permits. This process will vary by the industry, state, location and other factors of your business.
- Start your business – Once all these things are done, you can easily start your business. Always ensure you open a business bank account so that your finances are secure.
8. Starting an Online Business
To start your online business, you have to follow the above-mentioned steps and a few additional ones which are mentioned below:
- Build your brand – Your brand building is what attracts customers to your online business. But for this, you need to analyze what you are as a brand. You need to show what makes you stand out from the rest.
- Build your website – To start an online business, having your business website is a prerequisite. Your website is the place where your customers would learn about your brand as well as the products and services you offer.
- Advertisement – When you are on an online platform, you need to advertise your website to reach out to customers. You can also use social media platforms to promote your website.
9. Coming Up With a Business Name
Having an appropriate business name could help you promote and grow your business successfully. A few guidelines could help you in deciding the right business name. Always keep your business name short, original, unique and a name that conveys the gist of your business. There are several business name generators available online which could suggest you a few significant names for your business.
10. Writing a Business Plan
For successful business growth, you need to execute your business plans wisely. A business plan will provide you with clarity in your business strategy. It is like having a to-do list and then checking whether you have performed the task written in your list. A business plan provides you with a better vision of your future goals.
11. How Do You Get a Business Loan?
Getting a business loan is not a difficult task. All you need to do is follow the below-mentioned steps:
- Approach a bank from which you want to take a loan
- Get full details regarding the loan sanction procedure and interest rates
- Provide your business details to the bank and also specify the amount you require as a loan from the bank
- Provide the required documents to the bank for verification
- Once the bank verifies the documents, your loan shall be approved
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