Start a Business: Essential Steps & Common Pitfalls - Essay Sample

Introduction

Talent, determination, hard work, and persistence are essential things that are required for starting a business. A lot of research and planning need to be done before a business is set up. Common factors have been identified, contributing to the failure of new business. Any business failure is a combination of many factors, as discussed below (Skripak, Stephen 155). First, a bad business idea is a common factor that happens at conception stage or the execution. For example, any business idea of selling snow blowers in Hawaii is a good one but still one that fails.

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The second common factor is experiencing managerial incompetence. This is because new owners of a business have no experience in how to run a business, and many of them have limited managerial skills. For example, poor leadership skills are observed among new business owners as well as a lack of the ability to manage people in the business. The third reason associated with business failure is the inability to handle growth. Often, business growth is a good idea and something admired by many, but this becomes a challenge when the role of the owner changes. In such a situation, the owner needs to delegate some of their roles due to the increased volume of works. However, some are not able to conduct a successful transition, thus bringing in the failure of the business. New businesses experience financial problems because after borrowing the cash for starting up a business, they do not have enough money to operate the business. Failure comes in when the business is acquiring a few incomes, yet a lot of things need to be done with the limited cash.

Some factors have been associated with the success of a new business. One primary reason is proper business planning (Ahmed, Naseer, Muhammad, and Syed 4-5). Depending on how the owner of the business is willing to operate the business, then the more they will plan effectively. A successful business is evident where the owner uses the business plan not to acquire finance but to evaluate how effective their business idea. Secondly, a successful business is associated with a large number of full-time employees. This is because each particular member of the business brings in their positive contribution leading to the positive production of the business. Again, a large number of employees help in building up the business due to enough human resources.

The third factor leading to business success is the incorporation of technology. Technology allows the business to grasp and be updated on the changing trends in the business enabling the business to fit in the competitive market. The business that has shifted their efforts to using technology has emerged victorious because they can reduce costs in terms of time and increase the productivity of high quality. Businesses that are owned or led by people who have experience from other fields tend to be more successful. This is because most of the owners starting a business feel comfortable in that field; therefore, they are committed and persistent in what they are doing. However, not just work experience is a reason for business success but increased work experience.

An example of a business that failed is the MiniScribe. MiniScribe manufacturer of computer disk drives, which was founded in 1980 (Werhane, Patricia, et al. 2017). The company faced significant problems, some of them being the shift from the usage of 5.25 to 3.5 disks and the decision made by IBM's to produce their computer disk drives. The company experienced significant problems brought in by the managers because they had intentions of increasing profit. They shipped more units than it was required, and unfortunately, they did not account for the returns at the end. This went to a far place of the company accounting for their assets by counting even the defect products and packing bricks to compensate for the disk drives. Due to this, a lot of losses were recorded in the company, and after a short while, the manager called Wiles resigned. After the resignation of Wiles, his successor realized that there was a conspiracy and started an internal investigation. It was recognized that sale acceleration and the inventory were highly exaggerated with a face invention of a computer program named "Cook Book." A year later, the company was declared bankrupt, forcing its closure.

One of the most successful businesses is the Apple Inc company. Apple inc company manufactures computers, digital media products, computer software as well as other consumer electronic items. Apple Inc has been operational for the past thirty years. The success of Apple has been related to the good leadership of the company. Good leadership skills mean good productivity and high-quality products. Apple leadership is transpired to employees too because they have been seen to know what to do, how to do it, and why they do it. Apply has incorporated the use of technology, which has created a significant impact on its success.

Conclusion

In conclusion, there are various common reasons for the failure of a business, some of which are incompetence managerial, lousy business ideas, and inability to manage business growth. Other business reasons associated with the success of the business are the incorporation of technology, better business planning, and a large number of full-time employees. An example of a business that has failed is the MiniScribe, which failed because of bankruptcy. Apple Inc company has been classified as one of the most successful companies due to its good leadership skill enhanced.

Works Cited

Ahmed, Naseer, Muhammad Shahbaz Shabbir, and Syed Mubarak Abbas Shah. "Success Factors of Small Enterprises." (2008).pg 4-5

Skripak, Stephen J. Fundamentals of business. Virginia Tech, 2016.pg155

Werhane, Patricia H., et al. "Marge Norman and MiniScribe Corporation." Darden Business Publishing Cases (2017).