Q.Describe briefly the steps involved in starting a new business.

Starting a new business follows a sequence of steps that move from spotting an opportunity to launching and growing the enterprise.

The entrepreneur mobilises resources, scans the environment for opportunities, develops a product or service idea, assesses its feasibility and prepares a business plan, gets the plan appraised by funding agencies, commissions and launches the project, and finally adapts to and manages its growth — as detailed in the full answer.

The steps involved in setting up a new business are:

1. Resource mobilisation. The entrepreneur begins to gather the funds and other resources needed for the venture, often convincing funding institutions on the strength of the idea.
2. Scanning the environment for entrepreneurial opportunities. Opportunities are actively searched for through observation, personal and professional networks, and research of international, domestic and sectoral conditions.
3. Development of the product or service idea. The general opportunity is narrowed down to a specific product or service offering, differentiated to exceed customers' value expectations.
4. Assessment of feasibility and preparation of a business plan. The idea is tested for technical, economic, financial, commercial and legal feasibility, and the findings are compiled into a business plan.
5. Appraisal by the funding agencies. The business plan is submitted to the funding authorities (in India, typically the State Finance Corporation), which appraise it and, on being satisfied and on receipt of margin money, may sanction the loan.
6. Project commissioning and launch. The entrepreneur sets up the factory premises, installs equipment and obtains input supplies to begin manufacturing and marketing the product.
7. Adaptation and management of growth. Entrepreneurial functions do not end at start-up; the entrepreneur looks after day-to-day operations and strives for the stability and growth of the enterprise.

Following these steps in sequence takes an idea from conception to a functioning, growing business.