The purpose of this report is to investigate the challenges of setting up a business and the difference between the major forms of business; particularly, niche markets as compared to the larger mainstream markets.
Define three (3) challenges when setting up a business. Explain why they are challenges.
The three main challenges when setting up a business are: cash flow, product supply and demand, and human resources. Depending on the type of business, you will have the initial cost of beginning the business prior to any income derived from that business. What type of product are you selling and is there a consumer demand for the product. Finally, staffing the business is also a major concern.
Depending on the type of business, there will often be an initial cash investment. Property will have to be acquired from which you will operate the business. The cost will depend on the location, where you product will be in demand, whether you are purchasing the property or renting; and the amount of square footage needed. The property needs to be decorated in order to display the product and there is also the expense of the inventory; labor is also involved with decorating and stocking the inventory. Are you able to do this yourself or will individuals need to be hired? Also, do you as the business proprietor have enough cash flow to sustain your living expenses during this time, when there is no or little income available?
Urban Outfitters Continuing Case Study: Creating a business. 2
The business began with an idea or product and the question must be answered as to whether or not it is in demand. Consumers must want the product in order for the business to succeed; if the consumer does not want the product, the business will fail. Therefore, one must ask if the product will be in demand...