Business creation is the implementation of a new combination of production factors. It is a fundamental step in the creation of wealth for entrepreneurs, who take risks in terms of time, equity or even their careers to turn their ideas into thriving enterprises. Business creation also benefits communities, as a successful business will generate jobs, taxes and other contributions to the area.
In order to understand the dynamics of entrepreneurship, researchers have focused on studying the profile of the individuals who start companies. One of the most important aspects of this profile is cognitive variables. The literature highlights the importance of three of these variables: perceived opportunities, self-efficacy and fear of failure.
The perception of opportunities is related to the entrepreneur’s knowledge about the business environment, while the self-efficacy and fear of failure are related to the entrepreneur’s perceived capacity to manage the risk associated with entrepreneurship. The latter is influenced by previous experiences, as well as the personal characteristics of the entrepreneur (Garcia, Martinez and Fernandez 2010).
Whether you have a great idea for a product or service or have a business plan, it’s essential to determine whether there’s a market for your offering. Upfront research will help you decide if your venture is a good fit, and will help you prepare to make key financial decisions and complete a series of legal activities. Choosing the right type of company is crucial, with the most popular option being a limited liability corporation (LLC). This allows you to separate your personal assets from those of your business and can be beneficial in terms of tax deductions.