Starting a Business and Being Your Own Boss Can Be Exciting

8/20/2019 Starting a Business and Being Your Own Boss Can Be Exciting

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I. Introduction.

Setting up a new business means to encourage oneself in business activity

and work. Starting a business and being your own boss can be exciting, and for

many it is the professional goal of a lifetime. The aim of every business is to

earn profit through products and services. Thousands of new businesses are

started every day, yet history shows that a majority of them fail because of a

flawed business concept, inadequate financing or poor management. The

complexities of business have increased manifold. Starting a new business can

be risky. Here are some issues to consider when setting up a new business

- !usiness plan- Structure- "ntellectual property- #inance- $arket Segmentation- Health % safety- "nsurance- &ompetition

II. What needs to be taken into consideration when one sets up a

new business?1. Preparation of business plan.

What is a Business Plan?

' business plan is a critical management tool for the creation or expansion

of any business. "t is a game plan ( a concise, written record of objectives and

how to obtain them. "t describes, at a minimum, a product or service,

customers, competition, management and financial arrangements. "t should

also outline production and marketing plans.

Why Plan?

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)lanning is essential. "t

• helps define goals

• outlines roles and responsibilities

• sets a benchmark to record and compare progress

• provides essential documentation usually required by financial

institutions and government assistance programs.

There are many styles of business plan. However most will include the

following

1.1. Assess Your Business Idea

's you begin, examine every aspect of your business carefully and

honestly. !e realistic in assessing what you are capable of and the

opportunities that exist for your success. &onsider the following questions.

• *hat is the purpose of my business+ !e able to express it in a couple

of short sentences.-

• *hat is the specific market " want to fill+ 're customers willing and

able to purchase my product or service+

• o " have the necessary skills, ability and resources+

• How much money do " need at start(up + o " have the resources+ "f

not, where could the funds come from+

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/our answers will help determine the feasibility of your ideas. Some

require personal assessment, others external research. &ontact your local

!usiness 0nterprise1Self Help &entre for more information.

1.2. The arketin! Plan

' marketing plan will help you consider these aspects

• who your customers are

• how your products will be priced

• how you will promote your product.

$ake sure to address these four 2)3s2 of marketing product, price,

promotion and place distribution-. The plan should also strategically identify

where you are now, where you want to go and how you are going to get there.

1.". The Production Plan

This is sometimes called the operating or manufacturing plan. )repare a

brief outline of your business3s basic operation.

&onsider including

• how the product is manufactured or how the service is to be provided

• where the supplies and material will be purchased

• what after(sales service is required repairs, warranties, etc.-

• what land, buildings, facilities and equipment are required, including

costs and financing lease or own-, renovations, local taxes and utility costs

1.#. The $inancial Plan.

The financial plan is the backbone of your business plan. 4sually, a

company creates a #inancial )lan immediately after the vision and objectives

have been set. The #inancial )lan describes each of the activities, resources,

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equipment and materials that are needed to achieve these objectives, as well as

the timeframes involved.

The #inancial )lanning activity involves the following tasks

• 'ssess the business environment and business targets.

• "dentify the types of resources needed to achieve these objectives

• 5uantify the amount of resource labor, equipment, materials-

• &alculate the total cost of each type of resource

• Summari6e the costs to create a budget

• "dentify any risks and issues with the budget set

)erforming #inancial )lanning is critical to the success of any organi6ation.

"t provides the !usiness )lan with rigor , obvious and scientific.

%&a'ple (

)ietna' *airy Products +oint ,tock -o'pany

To become one of the most popular milk brand in 7ietnam market, this

company had the difficult years of the new date set up. So how did they set up a

business plan+

a- 7ision.

7inamilk will be the fastest and sustainable growing healthy dairy and food

company by building a long(term competitive advantaged product portfolio

across the scale.

b- $ission.

7inamilk continues to expand its existing geographical coverage and product

portfolios to maintain its sustainably dominant position in the local market and

maximi6ing its shareholder value.

c !usiness strategies.

*e aim to maximise shareholder value and pursue a business growth

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strategy based on the following principal components

8 0xpansion of market share in existing and new markets9

8 evelop a comprehensive portfolio of dairy products to target a broader

consumer base and expand into higher margin value(added dairy products9

8 evelopment of new product lines to satisfy different consumer

preferences9

8 !rand cultivation9

8 &ontinuously enhancing supply chain management9

8 evelopment of raw material sources to ensure a reliable and consistent

fresh milk supply base

d- !usiness philosophy.

:'lways satisfy customers with high(quality, safe, and diverse products, the

best service and competitive prices;.

2. ,tructure of business.

/ou can set up a business as a sole trader, as a partnership or as a limited

company. The type of structure you choose depends on the kind of business you

are running, with whom you will be doing business. "t is advisable to get the

advice of a solicitor or accountant when considering the structure for your

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egistration Affice &>A- and the company reports and

accounts must be returned to the &>A each year.

". Intellectual Property.

To many, intellectual property ")- is a rather obscure legal concept that

can only be properly understood and applied by those who are specially trained.

/ou may be asking yourself why any small and medium(si6ed enterprise S$0-

and, more so, your S$0 should pay attention to "), or what benefits your S$0

could possibly draw from using it. The thing we need take into our mind is

Trademark registration. Trademark is a sign for consumers to identify the goods

or services of each company from those of others. "n 7ietnam, many businesses

today have not paid sufficient attention to trademark protection. Anly when

their trademarks would be infringed by other companies or competitors, they

really concern to protect their trademarks and business, and may come to reali6e

that their trademarks have been registered by others. Such situation will

negatively impact the business financially. Trademark rights will be protected

within the national territory, therefore when a trademark has been registered in

7ietnam, it will be protected in 7ietnam. There are many reasons why the

violation of intellectual property rights exist and increasingly complex. #irst,

acts of trafficking in counterfeit goods production, always create super profits.

Second, many owners of intellectual property is not really paying attention to

the protection of their rights, do not have high awareness in the registration of

trademarks , few enterprises have speciali6ed departments to take care of the

intellectual property and think as if it is not the task of the business

strategy.Third, the treatment of intellectual property violations primarily stop at

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administrative sanctions, not enough to deter violators.

#or enterprises, protecting the intellectual property of your business is

urgent. To protect the brand right from research, design and build objects of

intellectual property, business must take into account technological measures to

protect these objects before registration.

%&a'ple (

)ina'ilk and Intellectual Property (

7inamilk is the biggest dairy company in 7ietnam. 0stablished in =DEF as

the Southern &offee(airy &ompany, then renamed to 4nited 0nterprises of

$ilk &offee &ookies and &andies " in =DEG and finally 7ietnam airy

&ompany was formally established in =DDB. "n


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should start by learning about the different types of financing that are available

and assessing which one best suits your needs. /ou can reduce your need for

assistance by managing your finances effectively.

• Kovernment grants and financing

#ind out about government grants, loans, and other financing available for your

business.

• !ankers

!orrowing money from the bank is one of the simplest ways to get needed

funds to start or grow your business. !y offering a building or assets as

collateral, you can often get low interest rates. However !anks expect their

principal and interest payments every month, on time, whether you make

money or not. "f you fail to make timely payments, it is very difficult.

)lus, theywant to see your business plan, as that is the primary document

upon which they make their decision to loan, even to see some business

activities and revenue before they consider you.So you may lose some of your

business control.

• )artnerships

"f you know a trustwworthy family member or friend might be rich, you can

approach them to borrow some money for your business with very low interest

rateeven non. The borrow process is less complex. However, you just borrow

small amount of money.

• )ersonal assets

See how you can use personal assets to help finance your business.

• #inancing from non(government organi6ations

There may be not(for(profit or community(based organi6ations that can offer

you financing or direct you towards financing.

• "ndividual "nvestors or 7enture &apitalists

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Cearn how to develop the plan, the materials and the confidence to go after the

equity financing for your business opportunity

%&a'ple(

'fter setting up your company you must havemanagement capital tooperate well.

' young 7ietnamese may have excellent business ideas. !ut to bring that

ideas into a company and turn ideas come reality in 7ietnam is extremely

difficult. &urrently, in 7ietnam3s big cities, the rent is so high. Af course, along

with that office rents are not cheap. *ant to rent a place to do the office at

around tens of million dong for per month. "t is too difficult for young people to

establish the company.

$oreover, according to areport of the Keneral epartment of Statistics,

$inistry of )lanning and "nvestment for the first L months of


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$arket segmentation plays a very important role to locate the label. "t is the

main tool to identify the target consumer groups as well as a hint to identify

important and innovative benefits brand unique differences.

%&a'ple

This explains why the beer brand continuously use the girls to introduce the

product promotion girls or )K for short- in restaurants, pubs to strengthen the

brand image as well as sales. 'n ingenious invitation of the ... pretty easy to

make the machine alluring beard form drinking more or try new products.

0. ealth safety.

*orking environments that are safe and healthy are an important part of a

successful employment relationship and contribute to a successful business.

's an employer, you need to work with your employees to identify dangers and

manage them.

0very workplace is different. 7ietnam@s legislation recogni6es this by

providing a framework for employers to address health and safety in the way

that is most appropriate for each workplace.

&reating a safe and healthy workplace is a basic part of the relationship

between you and your employees.

What are 'y responsibilities as an e'ployer?

/ou are responsible for providing a safe workplace, and for ensuring the health

and safety of those working in or visiting the workplace you control. To achieve

this you are expected to

• manage dangers by eliminating or minimi6ing them

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• provide suitable protective clothing if necessary- and equipment to staff

and ensure it is worn

• provide safety information to staff

• provide training and supervision so that work is done safely

• develop procedures for dealing with emergencies

• monitor the health of employees in relation to the dangers of their work

3. Insurance.

3.1. 4eneral 5iability Insurance( 0very business, even if home, needs to

have liability insurance. The policy compensate if you, your employees or your

products or services cause or are alleged to have caused bodily injury or

property damage to a third party.

3.2. Property Insurance "f you own your building or have business

personal property, including office equipment, computers, inventory or tools

you should consider purchasing a policy that will protect you if you have a fire,

theft, smoke damage etc. /ou may also want to consider business

interruption1loss of earning insurance as part of the policy to protect your

earnings if the business is unable to operate.

3.". Business owner6s policy 7B8P( ' business owner policy packages all

required coverage a business owner would need. Aften, !A)@s will include

business interruption insurance, property insurance, vehicle coverage, liability

insurance, and crime insurance . !ased on your company@s specific needs, you

can alter what is included in a !A). Typically, a business owner will save

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money by choosing a !A) because the bundle of services often costs less than

the total cost of all the individual coverage@s.

3.#. -o''ercial Auto Insurance( &ommercial auto insurance protects a

company@s vehicles. /ou can protect vehicles that carry employees, products or

equipment. *ith commercial auto insurance you can insure your work cars,

S47s, vans and trucks from damage and collisions. "f you do not have

company vehicles, but employees drive their own cars on company business

you should have non(owned auto liability to protect the company in case the

employee does not have insurance or has inadequate coverage. $any times the

non(owned can be added to the !A) policy.

3./. Worker6s -o'pensation( *orker@s compensation provides insurance to

employees who are injured on the job. This type of insurance provides wage

replacement and medical benefits to those who are injured while working. "n

exchange for these benefits, the employee gives up his rights to sue his

employer for the incident. 's a business owner, it is very important to have

worker@s compensation insurance because it protects yourself and your

company from legal complications. State laws will vary, but all require you to

have workers compensation if you have *< employees. )enalties for non(

compliance can be very stiff.

3.0. Professional 5iability Insurance( this type of insurance is also known

as 0rrors and Amissions "nsurance. The policy provides defense and damages

for failure to or improperly rendering professional services. /our general

liability policy does not provide this protection, so it is important to understand

the difference. )rofessional liability insurance is applicable for any

professional firm including lawyers, accountants, consultants, notaries, real

estate agents, insurance agents, hair salons and technology providers to name a

few..

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3.3. *irectors and 8fficers Insurance( this type of insurance protects the

directors and officers of a company against their actions that affect the

profitability or operations of the company. "f a director or officer of your

company, as a direct result of their actions on the job, finds him or herself in a

legal situation, this type of insurance can cover costs or damages lost as a result

of a lawsuit.

3.9. *ata Breach "f the business stores sensitive or non(public information

about employees or clients on their computers, servers or in paper files they are

responsible for protecting that information. "f a breach occurs either

electronically or from a paper file a ata !reach policy will provide protection

against the loss.

3.:. o'eowner6s Insurance( Homeowner@s insurance is one of the most

important kinds of insurance you need. This type of insurance can protect

against damage to the home and against damage to items inside the home.

'dditionally, this type of insurance may protect you from accidents that happen

at home or may have occurred due to actions of your own.

3.1;. enter@s insurance is a sub(set of homeowner@s

insurance which applies only to those who rent their home. The coverage is

protects against damage to the physical property, contents of the property, and

personal injury within the home.

3.11. 5ife Insurance( Cife insurance protects an individual against death. "f you

have life insurance, the insurer pays a certain amount of money to a beneficiary

upon your death. /ou pay a premium in exchange for the payment of benefits to

the beneficiary. This type of insurance is very important because it allows for

peace of mind. Having life insurance allows you to know that your loved ones

will not be burdened financially upon your death.

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3.12. Personal Auto'obile Insurance( 'nother very important type of

insurance is auto insurance. 'utomobile insurance covers all road vehicles

trucks, cars, motorcycles, etc.-. 'uto insurance has a dual function, protecting

against both physical damage and bodily injury resulting from a crash, and also

any liability that might rise from the collision.

9. -o'petition.

Scope of competition has become wider, risk in business has increased

considerably. ' clear understanding of your competition is key to the success of

any business. 0ven if your product or service fills a unique gap in the market,

there are always other companies offering something similar, or there are other

ways to satisfy the same customer@s need. The key when thinking about your

competition is to learn what makes the customer choose one product or service

over another. The different options that customers consider are usually

competitors.

&ompetition can be either direct competing by selling the same products-

or indirect competing for the same market-. The intensity of that competition,

whether direct or indirect, will affect the overall potential for success of your

business. That is why it3s important to consider all types of competition when

planning your business, to ensure that you have the edge over others in your

industry.

$ultiple businesses offering similar products and services create direct

competition. !urger Ming and $conald3s are direct competitors.

#or example, hunger creates a need to consume food. ' customer may buy

bread, grab some take(out sushi, or pick up a fro6en pi66a from the grocery

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store and take it home to cook. 'll three of these products are very different

from each other, but they compete indirectly because they all satisfy hunger.

8ne ore %&a'ple=

' consumer who needs transportation would logically shop for a car. That

consumer has many vehicles to choose from, including trucks, compact cars,

sports cars. These direct competitors have different prices and satisfy different

needs9 some are more spacious, some are faster, and some are more fuel

efficient. However, the consumer could also choose to buy a bicycle, a

motorcycle, or a bus pass9 all of these options create indirect competition for car

dealerships. >egardless of which option the consumer chooses, his or her need

for transportation will be satisfied. 0valuating your consumer3s many options

will help you assess the level of direct and indirect competition within your

industry.

III. -onclusion.

Setting up a new business may be risky. So these considerations we@ve

mentioned will help you clear and more confident to start a new business.

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Starting a Business and Being Your Own Boss Can Be Exciting