What Is Business Creation?

business creation

The definition of business creation – the implementation of a new combination of production factors – reveals that starting up a company is more than simply opening a store or putting out an offer. Business creation involves a complex process of implementing a new economic activity, which is formalized in a specific document called the business plan.

Aside from the creative project at its core, starting a business requires a substantial amount of money. Consequently, many entrepreneurs find themselves asking for help from family and friends or seeking out loans. It is also common for start-up teams to come together based on their shared passion, which can bring added strength and commitment to the venture.

Market research is essential for determining whether your business idea will have an audience. In addition, it will provide valuable information about the existing clientele, the competition and the relevance of your entry to the sector. The results will help you refine your positioning, decide on the product line and pricing structure and determine a marketing strategy.

It is commonly believed that a downturn is a good time for launching a new business, as the competition might be weak and the inputs (labor, supplies) cheap. However, there is also evidence that the number of new firms tends to decrease when the economy goes into recession.

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