Factors to consider when starting a small enterprise

Below are some of the factors to consider when starting a business:

  1. Entrepreneurial traits
  2. Business management and technical skills
  3. Long term market demand for product/service
  4. The cost of starting, operating and personal finance
  5. The level of competition – direct, indirect and future
  6. The business location – zoning law and appropriateness
  7. The rules and regulations for operating the business.
    • Legal registration
    • Tax compliance
    • Relevant licenses
    • Code of conduct
    • Environmental requirements
  8. The anticipated profit.
    • Importance of profit
    • Adequate to cover inflation rate and opportunity cost
    • Adequate to cover all expense, savings and investment
  9. The machinery, tools and equipment required and their cost.
    • Lease/buy decision
    • Calculation of lease/ buy decision
    • Maintenance cost
    • Availability of spare parts
    • Cost of service
    • Availability of technical support
    • Technological advances
    • The source of supply of goods/raw materials.
    • Identify long term supply sources/ reliable source
    • Quality of supply
    • Alternative sources of supply
    • Terms of supply should be favourable

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