Business Startup – Risk, Opportunities, Business model and Social Significance


Starting a new business is an exciting affair. A business startup needs a lot of planning and thinking. Many important decisions need to be made about its various aspects. The business startup may deal in products or services and its operations, administration and marketing have to be taken care of. It is a challenging task. There is greater difficulty in starting a new business than taking over an existing one. There are no defined yardsticks for startups. New benchmarks need to be established once the operations get streamlined. For that, a business startup requires professional management and funding.

business startupsPersonal Risk:
To start a new business, one has to take personal risks and lose the security of monthly salary if one has to leave a secure job. Banks and investors are not likely to fund startups as the incidence of risk is high. Though venture capital from an equity fund is a good option, securing it may not be easy.

Problems and Opportunities:
Problems generate new opportunities. Opportunities lie in identifying unmet wants of people and the price the customer is willing to pay for satisfying such wants. Research can help determine the amount of profit that can be generated from such ventures. In this regard, the person who wants to start the new business must be able to identify the market clearly. The new product or service must be able to satisfy the customers’ need and generate sufficient revenue to cover costs and allow for some profit margin. More than the profit, there must be sufficient demand to make the venture financially viable.

Business model:
While investing money and time, one should be very careful. Business models change with time. As new models enter the competition, older models face the heat. Hence, one has to be conscious of market dynamics. When one has to advertise, one should optimize the resources. Some of the business startups are leveraging social networking sites, reaching the targeted customers and expanding their business. Business startups have to be careful with their expenses too. Some expenses such as insurance, license and permit fee are inevitable. Similarly, technological and employee expenses are inevitable. Besides, they need to invest in equipment and supplies and need working capital. One has to keep tabs on all such expenses initially so as not to overspend.

Social Significance:
Business startups have great social significance. They may offer higher pay than established players. Moreover, they create new jobs and generate employment, which the society needs badly. For employees with considerable expertise and experience with few opportunities to progress in their current organization, business startups offer excellent opportunities to shoulder higher responsibilities and put their skills to good use. Whatever the line of business, startups usually have informal work atmosphere, which brings out the best in the employees. Such businesses also provide greater promotion opportunities as people move up the ladder to higher positions.

The reality of the market is that six out of ten business startups end up as failures. But, that does not deter newcomers. Some of the business startups a few years ago gave turned into extremely successful corporations today. Dell, Google, Intel, Apple and Amazon are some such startups that grew phenomenally over time. Notwithstanding failures among them, business startups contribute much to the industry and society.


1 Comment

  1. I agree with your statement that society needs entrepreneurs badly to create more jobs for society.

    However, with banks being cautious with giving loans out and Obama’s new strict rules and regulations on businesses the economic environment is not friendly for creating new entrepreneurs. America’s changing from a growth economy to a safe more bureaucratic economy.

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