Business creation is the implementation of a new combination of production factors. It distinguishes from a takeover of existing businesses, which are characterized by the use of the same production factors. The start-up process may be short, intense and rushed or it can take years of trial and error to develop a viable product.
Entrepreneurs can come up with new ideas for products and services by focusing on what they love or by thinking about how to make something better. They also often find new ways to monetize existing products and services, which allows them to focus on the core mission of their company. For example, someone who loves to sing can turn their hobby into a music career by opening up a recording studio or by setting up an online store to sell their own recordings.
A well-designed business plan can help an entrepreneur determine the best way to launch a business and chart a course for future success. It should include an executive summary that summarizes the business plan, a statement of purpose, market analysis and a competitive analysis. It should also include financial projections and a description of the type of business entity being formed.
Nurturing entrepreneurship can have a positive impact on the economy and society. Entrepreneurs can create jobs and stimulate economic growth by adding to gross domestic product. They can also increase wealth and the tax base, allowing greater government spending on projects. Moreover, they can inspire innovation in other companies by creating new businesses that improve or replace inferior offerings in markets and industries.