Makeia C. Jackson
Instructor Sally Rogers
Introduction to Business
January 30, 2011
Identify at least three challenges when setting up a business. Explain why they are challenges.
Three challenges when setting up a business is capital, location and marketing. To start a business you need money to get it off the ground. This money will be used to rent or purchase space for the business, furniture and equipment, supplies, professional fees for legal and accounting and research and development of your products. This money will also be used to pay employees. Unless you were born into a wealthy family, money has to come from someplace to get the business running. Figuring out what type of funding will work best for the company will also be something to consider. There are different funding stages: seed capital, start-up capital, expansion capital and bridge capital. Seed capital is used to do the initial research and planning. Start-up capital is the funding that will help you with paying for the equipment, rent, supplies, and etc. for at least the first year of the business. Expansion capital is for funding a business that is now ready to grow in every area: inventory, building, equipment and etc. Bridge capital ties the current funding’s and the new funding’s together. As all of these levels of fundngs are important the one that will make or break the start of the business will be the start-up capital. Start-up capital will cover payroll, utilities, rent, marketing and sales, supplies, maintenance, insurance and taxes. You want to make sure you request or have enough start-up funds so that the business can run smoothly and you don’t go out of business due to poor management. When it comes to marketing you want to make sure you are meeting the needs of the customers at the start of a business. You have to make sure there is value in the products or services being offered. Every customer doesn’t...