The Start Up: Things to Consider when Starting Your Business

In a simple world, a person could come up with an idea and have his invention off the ground and into the market in no time. Money would be of no concern nor would social/governmental factors and other worries. However, that is the world of dreams. Here in the real world, we have more things to consider than just a good idea when starting a business.

First, one must consider the business type most suited for the proposed idea because this addresses the all important question of from where the money is coming. If you're an inventor of a product you expect will be massed produced who does not have the financial means to start this business on your own, sole proprietorship is very likely out of the question. While startup costs for sole proprietors are generally the lowest among the business types, they will likely not be low enough to allow for the manufacturing of such an item..

So that leaves only two other models: general partnership and corporation. Maybe you can find a person willing to partner with you on the idea, but if the invention has potential safety issues, it may not be safe to create such an item and risk being sued without liability protection (Needleman 2010). That leaves just the corporation option.

If you are convinced that your idea will take off, you should offer it up to investors. While the corporation as a whole will have to file more paperwork and pay more taxes, there will be better liability protection should something go wrong. (Needleman 2010) Plus, the collective investment will provide a better monetary foundation for the business startup along with the marketing and manufacturing costs, including the costs of setting up a plant.

Additionally, you, the inventor and potential business owner, should research the political environment before making an investment or asking others to join on this investment. Legal, social and economic concerns must be dealt with before any work is done.

You must consider the market. Likely, you'll be doing business in a mixed market, one with some restrictions, though not as restrictive as an entirely planned economy. Still, you must first learn and understand what those restrictions are in order to comply with them. What are the tax and labor requirements? Are there any necessary safety and health inspections the business must undergo before obtaining a license to operate?

Once you've passed the legal and economic issues, you must consider the society, the people who will be your customers and employees. Is this item needed in this area? Can the item be improved to have more social relevance? Is there any way this item can offend the people in this culture? These are all very important questions to ask.

In closing, the inventor in such a scenario should present his idea to potential investors and begin a corporation. This will help him both financially and with liability. In addition, he should consider the political environment of his market. By taking into account the governmental business restrictions and the social behaviors of his potential customers and employees he will set his business on a harmonious path that will result in profits for the investors, the inventor, and the local area through job creation and a stimulated local economy.

Sources:

Needleman, S. E. (2010, September 26). Setting Up a Business Structure. Wall Street Journal (Online), pp. 1-2. Retrieved November 13, 2010 from ProQuest database.

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