THE BASICS OF BUSINESS

HOW TO START A BUSINESS

Koreneva Natalya
WHAT IS THE DIFFERENCE BETWEEN ENTREPRENEUR AND
BUSINESSMAN
Many people use the terminologies, businessman and entrepreneur, interchangeably. They
use these two terms to refer to anyone who owns a business and makes money.
Similarities Between Entrepreneur and Businessman
• Businessmen and entrepreneurs act as decision-makers.
• Moreover, both have managing abilities and can perceive and project forward.
• They possess great time management, organizational, and monitoring skills.
• In addition, they have good listening and communication skills.
However, there are distinct differences between an entrepreneur and a businessman.
• A businessman is naturally calculative, while the nature of an entrepreneur is intuitive.
• Most businessmen go for businesses with a high demand, which ensures huge profits,
disregarding the uniqueness of business ideas.
• In contrast, entrepreneurs establish startup companies adopting innovation, new ideas,
or business processes. They are always willing to take risks and meet uncertainties of
the business.
 WHO IS AN ENTREPRENEUR?
An entrepreneur is an individual who sets up business or businesses,
identifies and solves problems, is creative, innovative, opportunist, risk- According to Forbes, here is a list
taker, self-starter, and open-minded with the hope of making a profit from of great Entrepreneurs of our time;
the enterprise.
1.Bill Gates – Microsoft
• An entrepreneur is a starter. An entrepreneur is an initiator, a challenger 2.Larry Page and Sergey Brin –
and a driver. Someone that creates something new, either an initiative, a Google
business or a company. He or she is the beginning (and sometimes the 3.Mark Zuckerberg – Facebook
end) of a venture, project or activity. The entrepreneur might not be the
4.Michael Bloomberg – Bloomberg
ideator, but he or she is definitely the one that decides to make that idea
a reality. 5.Masayoshi Son – SoftBank
6.Elon Musk – SpaceX
• An entrepreneur is the driver. The entrepreneur is the person in charge, 7.Terry Gou – Hon Hai Precision
the leader and the person to look to for leadership. He or she is the one Industry
that pushes forward and inspires a team to follow. The entrepreneur is
8.Larry Elison – Oracle
the one that sits in the driver’s seat, and has the ability to change
direction, accelerate, slow down or even stop a venture. 9.Robin Li – Baidu
10.Aliko Dangote – Dangote Group
• An entrepreneur is accountable and responsible. The entrepreneur is the 11.Reid Hoffman – Venture
ultimate responsible for the destiny of its venture, which can be a
Capitalist
company, a project, or any other endeavor. The entrepreneur is the one
that has the highest stakes at the venture, thus the one that needs to be
empowered to fully direct the endeavor.
 WHO IS AN ENTREPRENEUR?
As per Fortune Magazine, nearly nine out of ten startups fail! The reason for this is that
entrepreneurs do not strategize correctly. (I will add more reasons later).
But an entrepreneur is what most youngsters aspire to be!
Many people delve into entrepreneurship because they believe that it is a fast way of
getting rich. However, the fact remains a strong successful enterprise is built bit by bit-
slowly. You need to have patience and slowly build your business.
Many people venture into starting their enterprise only because they are inclined towards
it.
Many have the risk-taking attitude and it propels them to start their own business.
Irrespective of the motivation, becoming an entrepreneur is not an easy task!
The word entrepreneur is derived from the French words, “to undertake.” An entrepreneur
can be understood as someone who undertakes risk and initiative with the end goal of
financial profit.
What you need is a clear-cut strategy of how to become an entrepreneur to gain a
foothold in the cut-throat competition.
HOW TO BECOME AN ENTREPRENEUR?
Step 1: Understand Yourself You must consider first what you love doing i.e. what you have passion for that come rain or
sunshine you will stick to, nurture carefully and watch it grow. You know in business, there are ups time and downs time,
passion will help you persevere. In other words, list you interest, skills.
Step 2: Find out Your Purpose The next thing is to ask yourself, why you want to be an entrepreneur? Is money the driving
force or is it your passion in a particular field that motivates you? Find out your purpose!
Step 3: Choosing a Business Model Whether you are a team player or work best when you are alone. This will help you
decide what type of business you will be best at, sole proprietorship or partnership.
Step 4: Choose Your Industry When you decide to start your enterprise, you have so many options available to you. Should
you start a retail store? or an IT company? or a fashion store? Options are many, but you should ideally choose the industry
that you have an expertise in.
Step 5: Market Research It is a good idea to study the products of your competitors and see how you can offer your
customers a better product. Market research is a must if you must succeed as an entrepreneur.
Step 6: Understand Your Buyer it is important to understand the needs of your buyer. Understand what they want, address
their pain points, and offer them products/services that meet their needs, so that it is easily accessible to their target
audience.
Step 7: Strategize Your Business After deciding your niche and business model prepare a clear business plan. It contains your
business objectives and your strategy for achieving those objectives.
And, of couse, Successful entrepreneurs have certain traits.
STARTING BUSINESS STEPS
1. Find a business idea
2. Choose a business name
3. Validate your product idea (to make a few
initial sales.)
4. Write your business plan
5. Get your finances in order
6. Develop your product or service
7. Pick a business structure
8. Research licenses and government
regulations
9. Select your tools
10.Find a business location
11. Plan workload and team size
12.Launch your business
 TOP 10 QUALITIES OF SUCCESSFUL BUSINESSMEN
To capitalize on the opportunities and convert the challenges into opportunities, businessmen should
possess the following qualities:
1. Determination and will to succeed A businessman should have courage and fighting spirit. There might be initial
failures and setbacks. He should not let them affect his focus and concentration. He should possess patience and
perseverance to fight against all problems and overcome all hindrances to achieve success.
2. Initiative and quick decisions A businessman cannot wait for things to happen. He has to grab the opportunities
that emerge and convert them into successful businesses. He needs to be quick in taking decisions because any delay
on his part would benefit the competitor. Speed to market is very important in today’s intensely competitive
environment.
3. Smart thinker. A businessman should be a smart thinker, understand changes that are happening, spot emerging
opportunities and utilize them for the success of his business.
4. Integrity and morality. The reputation and image built by a business plays an important role in determining its
success. Businessmen who indulge in corruption or resort to dishonest means cannot survive in the long run.
Therefore a businessman should be fair in his dealings. Globally it has been proved (e.g., WorldCom, Enron etc) that
businesses which are unethical, fail in the long run.
5. Education and training Though businessmen such as Henry Ford (Ford Motor Corporation), Bill Gates (Microsoft),
able to achieve success without the benefit of higher education, it is an accepted fact that education and training
increase the chances of success.
 TOP 10 QUALITIES OF SUCCESSFUL BUSINESSMEN
6. Continuous Learning and Updation. The pace of change is rapid and highly unpredictable in today’s business
environment. Product life cycles have become shorter due to changing preference of customers and rapid
advancements in technology. Therefore continuous learning and updation of knowledge is the key to success.
Businessmen should learn and keep themselves updated about the changes in the business environment including
the latest trends, new products introduced by competitors, fashions, technology, business models, best practices etc.
7. Ability to forecast. The future is full of uncertainty and change. To achieve success, a businessman should have the
ability to forecast future trends in the market. This would help him to adapt his business according to the new trends
or build new businesses to take advantage of new opportunities.
8. Dynamic Leadership. A businessman should have dynamic leadership qualities. He should be able to provide the
right direction and guidance and motivate his employees to higher levels of performance. Sustained success of any
business depends on the quality of leadership. There have been many instances where poor leadership has resulted in
once profit making companies to fail, while effective leadership has turned around loss making entities into profit
making organizations.
9. Risk taking ability. Every business venture involves some amount of risk and uncertainty. Profits are not certain and
there is possibility of incurring losses. At the same time it is true that ‘nothing ventured, nothing gained‘. Therefore
the businessman should have the ability to take calculated risks by analyzing the various business opportunities as
well as the risk and return involved in them.
10. Personal Qualities Apart from the above mentioned qualities, a businessman should possess commonsense,
courage, dedication, patience, tact, charm and emotional stability to succeed in business.
FUNCTIONS OF AN ENTREPRENEUR
1. Risk Taker: An Entrepreneur bears any risk in starting up and sustaining his/her business(es. He is always ready
for emergencies and should competitors emerge, thinks of strategies to outshine them. Mike Gafka said, “To be
successful you must accept all challenges that come your way. You can’t accept the ones you like.”
2. Sales Person: An Entrepreneur must be a good salesman. If one cannot sell as an entrepreneur, one cannot
succeed. S/he is responsible for marketing and advertising his products or services
3. Goal Getter: Entrepreneurs do not only set goals but also thrive so much to achieve their goals. Robert
Kiyosaki says, Most people know how to set goals, few people know how to achieve them, that is how to
identify an entrepreneur. Entrepreneurs set big goals, that it is scary to an ordinary man.
4. A Leader: One challenge of being an entrepreneur is that you have to be in charge. You must be at the
forefront of your business at least during startup. You should note that one cannot make it alone as an
entrepreneur. Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people
believe in themselves, it’s amazing what they can accomplish – Sam Walton. To be a successful entrepreneur,
you must possess the ability to attract smart people and build a great business team.
5. Decision Maker: Entrepreneurs determine the objectives of their business and they should know what is
suitable per time. He makes sure that his business venture is in good relationship with pubic authorities and
society. He also decides the market for his product or services.
6. Identifies and Solves Problem: An entrepreneur is quick to identify any problem facing his/her business and
immediately seeks a solution. It is said that he that wears the shoes knows where it pains. S/he knows that if
any challenge is not resolved as soon as they come, they are bound to face setbacks in the near future.
HOW TO DISCOVER YOUR PURPOSE
PURPOSE is the quality of being determined to do or achieve something, living with an
assignment, living to achieve a goal, the feeling of determination to achieve things in
life, having a plan, and working towards achieving such a plan.
Everybody has a gift or talent.
• You need to ask/check yourself and know that thing you love doing. Things that
family or friends do not force you to do. Things you do voluntarily. Those things you
are willing to skip other things for notwithstanding the consequences. Sometimes in
some people’s lives, they have skipped classes because of these personal passions.
This is what you need to discover yourself. I do not need to list people in this
category as they are so famous everyone knows them.
• What are your choices in life? Your choice channel also matters in identifying your
purpose.
• Will you like it to be incorporated? Do you intend to sustain the business or just
need a business that will be sustaining you until you get a pay job?
• Ask yourself, can I sell? If you can’t, you need to learn how to because business is
about selling (Be it a product or service).
• You should also determine how much risk you can take.
METHODS OF GENERATING BUSINESS IDEAS
“Anything that won’t sell, I don’t want to invent.” Thomas Edison

1. It all starts with a vision. All successful entrepreneurs all started somewhere – may it
be from scratch, etc. Create an inventory of your hobbies, things that spark your
interest and whatnot.
2. Think outside the box. Start being interested and involved in what is going on around
the world. Find 30 minutes a day to read popular blogs, news portals, or watch hot
news. Learn about startups that are launched and start growing. Becoming aware will
not take too much time but can help you to know a lot about different industries and
innovations.
3. Focus on problems. Successful business ideas solve real problems. Learn about the
problems people face in daily life. Talk with family and friends about their problems at
work, in sport, with clothing, food, etc. Think about your own problems and difficulties.
Is everything perfect in your life? Probably there are things you would love to improve
or change. Think about it.
METHODS OF GENERATING BUSINESS IDEAS
4. Read more business books. Books can help you to learn many lessons, give new
business ideas, and understanding how to implement them. For example,
• W. Chan Kim and Renee Mauborgne - book Blue Ocean Strategy. It teaches how to
create unique products and avoid competitiveness.
• The Lean Startup by Eric Ries - is a must-read book for every entrepreneur who is
going to build a digital product or a service.
• The Four by Scott Galloway - explains why and how such giants as Amazon, Google,
Facebook, and Apple became so successful. It shows how experiments can influence
the growth of business and how to make customers believe in the product.
5. Stay relaxed, but focused. When you feel that you need to generate business name
ideas as soon as possible and start putting all your efforts into this process, you can
hardly create something really successful.
6. Build your network Building a good network will give you an opportunity to switch from
working hard to working smart. Connecting with professionals in the sphere of your
business niche can bring not only an understanding of the highest customers’ needs but
can help you to get tons of smart advice from influencers and top leaders.
 METHODS OF GENERATING BUSINESS IDEAS
7. Analyze old ideas. Why invent something new if you can use already tested and
working ideas?! Remember - you cannot just copy someone’s idea, think about the
opportunities to change and improve them.
8. Get new experience. Try something new you never experienced before in your life. The
new atmosphere will make your mind think about all pluses and minuses, find problems
that need to be solved.
9. Focus on making life easier. There is a huge number of cool products that appeared
as a result of our attempts to make life easier, cheaper, and more convenient. And this
is really a great approach to creating new products.
• People love everything that simplifies everyday staff.
• What takes most of your time?
• What would you like to make easier or faster?
• Think about it.
• Probably, the answers will help you to create the next big idea. People are searching
for conveniences and time optimization. Make use of it. Think about the ways to make
life cheaper and easier.
 METHODS OF GENERATING BUSINESS IDEAS

10. Explore. Web surfing can be a great way to have fun and get some cool ideas. Visit
popular entertaining websites, question and answer platforms, popular forums and learn
social media trends and what people are talking about. What are some hot topics of
discussions and popular shared posts on social networks? It can be a good source of
ideas.
11. Travel more. Travelling is one of the most excited and effective ways to get inspired
and generate ideas for business. Visit different countries, meet new people, learn about
cultures and spend time sightseeing. It is like a breath of fresh air in daily life. Make
traveling be a part of your regular lifestyle. Set a plan, for example, to visit one new city
or country every month. You will see how much creativity it will evoke in you.
12. Use the Cut-up technique. This is the most well-known technique of generating
business ideas and creativity used by William Burroughs. It lies in cutting up words or
phrases from one sentence and randomly combines it with other phrases to create a new
sentence. Cut up ideas and their description, and rearrange them.
“The values of ideas lies in the using of them”
 THE SCAMPER MODEL
The SCAMPER Model is a Tool that helps professionals
Redefine existing Products by Rethinking How they are
Perceived, Used or Designed.
How to use SCAMPER:
• First, take an existing product or service. It could be an
existing product, service or idea which you want to improve
or which could be a great starting point for future
development.
• Then, simply go down the list and ask questions regarding
each of the seven elements. Please see our step-by-step
guide below.
• Apply the questions to values, benefits, services, touch
points, product attributes, pricing, markets and essentially
any other related aspect you might be able to think of that
has relevance to your ideation needs.
McDonald’s founder, Ray Kroc.
• Look at the answers that you came up with. Do any of the
•Put to other uses: Selling restaurants and real
answers stand out as viable solutions? Could you use any of
estate instead of just simply hamburgers. them to create a new product, or develop an existing one?
•Eliminate: Letting customers serve themselves
and thereby avoiding the use of expensive waiters. • Take the good ideas and explore them further.
•Rearrange: Having customers pay before they eat.
CHOOSE A BUSINESS NAME
There's no reason to make life harder with a dull, confusing, or irrelevant business name.
Keep things simple and focused: find a name for your business that makes it clear what
you do, that’s short and memorable, and that aligns with your mission and vision
statement.
• Keep it short and simple. Don't make customers work to remember your brand. One or
two words is ideal, although three to four short words can also work if they form a
concrete phrase. (E.g., Storq, Star Cadet)
• Dare to be different. Many brands underestimate the marketing upside of wild
originality. You can always amend your name with your product category to blend clever
with clear, too. (E.g., Deathwish Coffee, Beefcake Swimwear)
• Be original. You’ll need to ensure your business name isn’t in use by another business,
especially a competitor. To do that, run a free trademark search in the countries you’ll
be doing business in, and make sure to check Google and social media sites, too.
• Some things to consider when looking for business name ideas include:
Ease of spelling / Ease of pronunciation / Availability of matching domain name
General availability of special/hybrid characters
Meaning of name in foreign languages/cultures if doing cross-border business
MISSION
Mission, vision and values statements serve as the foundation for an organization’s strategic
plan.

The mission, vision, and values statements are the guiding forces behind an organization.
• The mission statement communicates the purpose of the organization.
• The vision statement provides insight into what the company hopes to achieve or become in
the future.
• The values statement reflects the organization’s core principles and ethics.
Together, these statements provide strategic direction for an organization, informing current
and future business strategies.
MISSION STATEMENTS
The mission statement defines an organization’s purpose or reason for being. It guides the day-to-day
operations of the organization
A good mission statement should only focus on what is most important to the organization. It should be
brief, clear, informative, simple and direct. It should avoid elaborate language, clichés, and
generalizations and it should emphasize outcomes and the people the organization is serving.
When writing a mission statement, consider the following questions:
• What do we do today?
• Who do we serve?
• What are we trying to accomplish?
• What impact do we want to achieve?
Examples:
• LinkedIn: To connect the world’s professionals to make them more productive and successful.
• Tesla: To accelerate the world's transition to sustainable energy.
• Doctors Community Medical Center - To enhance the health of the people we serve. (We deliver the
highest quality medical care to people of all ages, and practice healthcare the way it should be
VISION
The vision statement describes the future of the organization. It reveals what the company aspires to be or
hopes to achieve in the long-term.
It serves as a guide for choosing current and future courses of action.
An effective vision statement should be unambiguous, futuristic, realistic, aspirational and inspirational. It
shouldn’t be generic but rather focus on outcomes specific to the organization.
When writing a vision statement, consider these questions:
• Where are we going moving forward?
• What do we want to achieve in the future?
• What kind of future society do we envision?
Examples:
• LinkedIn: To create economic opportunity for every member of the global workforce.
• SouthwestAirlines: To be the world’s most loved, most efficient, and most profitable airline.
• Doctors Community Medical Center – Living Healthier Together (provide not just better health
outcomes, but a far better healthcare experience.)
VALUES STATEMENTS
The values statement highlights an organization’s core principles and philosophical ideals. It is used to
both inform and guide the decisions and behaviors of the people inside the organization and signal to
external stakeholders what’s important to the company.
A values statement should be memorable, actionable and timeless.
The format of the values statement depends on the organizations; some organizations use one, two or
three words to describe their core values while others provide a short phrase.
When drafting a values statement, some questions to consider include:
• What do we stand for?
• What behaviors do we value over all else?
• How will we conduct our activities to achieve our mission and vision?
• How do we treat members of our own organization and community?
Examples: Doctors Community Medical Center
RISE
Respect
Inclusion
Service
Excellence
WORK PERMIT AND ETC..
“The way to get started is to quit talking and begin doing.” – Walt Disney
Ukrainian law allows both citizens and foreigners to open a business. In recent years, as
more foreigners start businesses in Ukraine, the procedure for the registration of a legal
entity has been simplified and now takes only a few days.
Foreign nationals legally residing in Ukraine have the same rights in terms of employment as
Ukrainian citizens. In order to hire a foreign national, an employer should obtain a work
permit issued by the employment center, except for the case when such a worker has a
permanent residence permit in Ukraine. If the worker is to be employed in the representative
office of a foreign company work permit is not required.
All tax and duties, rates, exemptions, rules as well as procedures and mechanisms for tax
assessment and payments are defined in the Tax Code of Ukraine.
The general Personal Income Tax (PIT) rate applicable to almost all income received by a
resident individual in Ukraine is 18%. Additional Military Tax at 1.5% is levied on the income
that is subject to PIT.
Employers are also liable to make payroll-based Unified Mandatory State Social Insurance
Contributions for insured employees to the State Pension Fund at 22% rate. The tax base is
capped by 15 the minimum monthly salary. (More info you will get in the second part of our
course)
FORM OF BUSINESS IN UKRAINE
The most common forms of business in Ukraine are the IE (individual entrepreneur, or “FOP”
in Ukrainian), LLC (Limited Liability Company, or “TOV” in Ukrainian) and PE (private
enterprise, or “PP” in Ukrainian).
In fact, LLC and PE are almost identical legal entities. The only difference is that the
relationship between founders of LLC is regulated by a separate law, but between founders
of PE – only by the statute. So let’s compare the IE and LLC.
Individual entrepreneur is a simple form of entrepreneurship as:
• It`s easy to register;
• It`s quite simple to keep accounts;
• BUT you’ll be liable for obligations to the extent of your entire assets (if get into debt, you
may lose your apartment, car or even personal belongings).
Limited Liability Company is the most common form of legal entity as:
It is more trustworthy than IE;
It`s the simplest among legal entities;
Company founders are liable for its obligations to the extent of parts made to the statutory
fund of company and property owned by the company, not personally assets.
WHAT YOU NEED FOR REGISTRATION
Register or log in (if already registered) in the citizen's office on diia.gov.ua using electronic signature.
Fill in online form to receive services.
The completed application for registration of a private entrepreneur will be automatically sent to the
registrar at the place of your registration or at the place of registration, which is indicated in the
resettlement certificate.
If you have chosen a simplified form of taxation, an application for the transition to a simplified system will
be automatically sent to the tax authority at the place of your registration or at the place of registration,
which is indicated in the resettlement certificate.
If you have chosen the general taxation system, you can also apply for registration as a value added tax
payer (VAT).
The status of the application can be checked in the citizen's office. Registration or refusal notification will
appear in your account, and will also be sent by email.
As a result information about your business in Ukraine will be put on the Unified State Register.
RECOGNIZED BUSINESS STRUCTURES
Ukrainian law provides for the establishment of a wide range of internationally recognized business
structures, including:
• Limited Liability Companies
• Joint Stock Companies
• Joint Ventures
• Representative Offices.
An LLC can be registered online via a special web-portal of the Ministry of Justice. Both online and offline
registration takes up to 24 hours and are free of charge. Usually, limited liability companies, partnerships have
no authorized capital amount limitations; the minimal authorized capital amount for joint-stock companies is
approximately 170 000 USD.
The founders of pa JSC should also submit a package of documents to the Ministry of Justice. Before that, a
private offering of shares among themselves needs to be registered with the National Securities and Stock
Market Commission, which also approves the results of the private offering and issues shares ownership
certificates to JSC’s founders. The overall JSC registration process usually comes down to 3 months.
Unlike LLCs or JSCs, a representative office is registered with the Ministry for Development of Economy, Trade
and Agriculture. State duty amounts to USD 2,500. The registration process takes up to 60 working days.
Registration application consists of a filled-out application form, a document certifying incorporation of the
parent company and a bank reference regarding accounts of the parent company.
LICENSING
Engaging in certain business activities in Ukraine is subject to government authorization. Some thirty business profiles are given
this special attention by means of the so-called licensing procedure. The procedure applies to, among others:
• Banking and Financial Services;
• Telecommunication Services;
• Generation, Transmission and Distribution of Electric Power and Nuclear Power Use;
• Education Services;
• Production and Distribution of Alcoholic Beverages and Tobacco Products;
• Production, Distribution and Storage of Petroleum Products, Liquefied Natural Gas, Motor Fuels, etc.
• Data Encryption Services;
• Construction of Objects of Medium (CC3) and High (CC2) Class of Consequences
• Production, Importation, Distribution and Sales of Pharmaceuticals;
• Manufacturing of Non-military Firearms, Ammunition to Them, Cold Weapons and Air Guns;
• Recycling, Storage and Burial of Household Waste;
• Production, Transportation and Supplies of Thermal Energy;
• Water and Sanitation Services;
• Transportation of Passengers and Dangerous Goods, International Road Transportation.
Registration of a trademark procedure can take from 14 to 18 months. However, trademark protection is effective as of the
application date. Applicants can choose to undergo an accelerated procedure taking up to 9 months. Trademark protection
period is 10 years.
TAX SYSTEMS

Chosen business activities (“KVED”s). You can choose them on Derzhkomstat`s site (Classification of
economic activities DK 009:2010). Type of taxation will also depend on chosen activities. The amount of
activities isn`t measured by law – write as much as you want. However it is better to choose only needed
ones. If it is necessary you can add them in future, but for a fee.
As per the legislation of Ukraine, there are two tax systems for business entities in Ukraine:
1) general tax system;
The general tax system is used by the default: the business entity has to pay 18% of the net profit. If the
amount of services rendered (goods produced) exceeds 1 000 000 UAH within one calendar year, the
taxpayer has to register as VAT-payer.
2) simplified tax system.
The simplified tax system can be used by small businesses. Not any business entity may choose it: first of
all, the yearly turn over shall not exceed 5 000 000 UAH, and second of all, not all types of business activity
are allowed to use this system. The tax rate is 5% of income without paying VAT or 3% of income plus VAT.
OUTLINE OF MAJOR CAUSES OF BUSINESS FAILURE
1. NOT SEEKING PROFESSIONAL ADVICE. No matter how informed you feel you are, once you want to start
up a new line of business, it is pertinent that you seek professional advice. This will help you ascertain
whether or not the business is profitable as you thought. It is good you have a mentor that will always put you
through to avoid silly mistakes. Another advantage of seeking professional advice is that, you are meeting
people that have already done the business and they have made the mistakes and known the best way of
doing it.
Never stop learning, read and learn about marketing not just about your industry but how other industries
buy and sell products and services and how you can do things even better.
2. LACK OF EXPERIENCE. Lack of experience is one of the causes of business failure. If you are inexperienced
or your management is made up of novices, then your business is as good as dead. When starting a new
business, it is advised you get the services of people experienced in that field. They can be your partners or
your employee. Get experienced marketers and well-trained customer service personnel.
3. LACK OF PERSONAL GROWTH. Many entrepreneurs do not invest in themselves. They want to be great but
they do not read nor research, neither do they attend seminars and workshops that can increase their
knowledge base. Personal development of your attitude and communication skills is a must. It is hard work
and it takes discipline. You will have a hard time succeeding without protecting and working on your attitude.
No one gets ahead in life without building themselves with new knowledge.
OUTLINE OF MAJOR CAUSES OF BUSINESS FAILURE
4. LACK OF GOOD CUSTOMER CARE. Your Customer Care Unit Defines Your Brand. It is very important that
you make your customer care a priority. A business with good customer care grows. Good customer care
brings return customers and return customers bring referral customers. If you do not treat your customer
well, they go to your competitors. Learn to show your customers that you appreciate them.
Bad customer care has killed a lot of businesses.
5. COPYING OTHERS. What worked for Mr. Francis must not work for Mr. Reader. Many people have gone
into business or made a business choice because they see others doing it and think they can be successful in
it if they try. It is good you add your own idea after proper consultation, that will distinguish you from others.
Copying without consultation leads to a dead end. Do Not Copy, Initiate
6. UNACCOUNTABILITY. You must be accountable for any dime your business makes. Most times, many
entrepreneurs could not account for their daily sales. Once there is a sale, they spend the money on
personal needs believing that they will make another sale. If you must succeed in business, you must be
accountable for every dime that you make. Make sure you plan out your spending, for a business you plan to
grow, 60% of your profit must go back into the business. Be Accountable.
7. POOR LOCATION. Bottom Line, you cannot start a business where the service is not required. Making it
classy will not make people to patronize you. A good market survey is required before a business location is
chosen. Poor Location Equals Reduced Patronage
OUTLINE OF MAJOR CAUSES OF BUSINESS FAILURE

8. LACK OF FOCUS. Entrepreneurs can easily be distracted by too many minor tasks. Every day that their
focus tends to shift, their thinking shrinks. A good entrepreneur or business person will never lose focus on
what’s important and where their priorities are. The weakness is when they get caught up in trivial
perfectionism in the tasks which can and should be left to others. Entrepreneurs should learn to delegate
tasks. The short-sightedness becomes obvious when DOING rather than BECOMING becomes an obsession.
Being busy does not mean being productive
9. WRONG EXPECTATIONS. Some startups were being sold the idea that all they need to do is get into
business and the money starts rolling in without doing anything. Sometimes it is the person’s fault because
they only hear what they want to hear or they think they know better. The bottom line, building a successful
business is not a 60-yard dash but a marathon. If you don’t want to die in poverty or see your business
collapse, then you must be diligent. Do Not Expect What You Didn’t Work For
10. QUITTING TOO SOON. This is the biggest reason why many businesses fail. If you do not persevere,
enquire, research, fail, and try and try again, you might not be successful in business. First, you should know
that any business done halfway can never be a success. You must strive against all odds to make a business
stand. Many entrepreneurs make the fatal mistake of commencing business with inadequate operating
funds. Such businesses don’t last as the initiators will easily be discouraged especially when there are big
competitors.
CONCLUSION
If you don’t want to live off a salary, entrepreneurship is one of the best ways to start
making money.
Starting your business might be the best opportunity ever to build something great.
Remember that you have nothing to lose and no matter what happens you can always go
back to your “normal” life and be successful there.
Don´t be afraid to take your chance. This is an opportunity that will pass away sooner or
later.
Remember, that even if you fail you will learn a lot out of this lesson.
Your experience will carry you forward to be successful in your future life.
And also you can proudly say that at least you tried!

Try and Try and Try until you Succeed, Never Give Up
Thank you for your attention!)

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THE BASICS OF BUSINESS

MARKETING

Koreneva Natalya
WHAT IS THE NEXT?
Starting a business can be an exciting adventure. Among the most popular reasons to
start a business are financial independence, career growth opportunity, creative
freedom, and personal satisfaction.
However, to get your business going, you need to deal with many issues, including
legal, sales and marketing, financial, people management, and many more.
When launching a startup, answer the following questions:
• What about the world that is changing that makes us necessary?
• What do we promise to customers at a basic level?
• What makes you unique?
• What makes you valuable to your customers?
• What emotions do you want to evoke in your customers?
• If your startup was a person, what would it be like?
• How would you present yourself to the world?
The lack of thoughtful planning is one of the common reasons for startup failure.
WRITE YOUR BUSINESS PLAN. WHY?
If you don't know where you're going, how will you know when you've arrived?
• Writing a business plan helps formalize your idea
• Writing a business plan may reveal more insight into how to start a business, especially as you
get to the logistics parts.
• You'll quickly figure out what questions you don't have answers to.
Some of the benefits of having a business plan include:
• Helps startups start right
• Gives you a birds eye view of your business
• Eligibility for loans
• Required by investors
• Enables accountability emphasizes proper record keeping
• Brings strategic alignment
• Gives stakeholders faith
• Highlights KPI
• Helps define roles, responsibilities and reward
Having a firm grasp of your "known unknowns" is important because all it means is that you're
actively not prioritizing finding a solution right now; that's a lot better than being unprepared or
caught off guard, especially if you struggle to answer these questions while seeking funding.
CREATE YOUR BUSINESS PLAN
A well-rounded business plan should contain the following sections:
Executive summary. The executive summary should be the first item in the business plan,
but it should be written last. It describes the proposed new business and highlights the
goals of the company and the methods to achieve them.
Company description. The company description covers what problems your product or
service solves and why your business or idea is best. For example, maybe your background
is in molecular engineering, and you’ve used that background to create a new type of
athletic wear—you have the proper credentials to make the best material.
Market analysis. This section of the business plan analyzes how well a company is
positioned against its competitors. The market analysis should include target market,
segmentation analysis, market size, growth rate, trends and a competitive environment
assessment.
Organization and structure. Write about the type of business organization you expect,
what risk management strategies you propose, and who will staff the management team.
Mission and goals. This section should contain a brief mission statement and detail what the
business wishes to accomplish and the steps to get there. These goals should be SMART
(specific, measurable, action-orientated, realistic and time-bound).
CREATE YOUR BUSINESS PLAN
Products or services. This section describes how your business will operate. It includes
what products you’ll offer to consumers at the beginning of the business, how they
compare to existing competitors, how much your product costs, who will be responsible
for creating the product, how you’ll source materials and how much they cost to make.
Background summary. This portion of the business plan is the most time-consuming to
write. Compile and summarize any data, articles and research studies on trends that
could positively and negatively affect your business or industry.
Marketing plan. The marketing plan identifies the characteristics of your product or
service, summarizes the SWOT analysis and analyzes competitors. It also discusses how
you’ll promote your business, how much money will be spent on marketing and how long
the campaign is expected to last.
Financial plan. The financial plan is perhaps the core of the business plan because,
without money, the business will not move forward. Include a proposed budget in your
financial plan along with projected financial statements, such as an income statement, a
balance sheet and a statement of cash flows. Usually, five years of projected financial
statements are acceptable.
SWOT ANALYSIS: DEFINITION
“SWOT analysis” sounds like some kind of scary accounting process—it’s not. Doing a
SWOT analysis doesn’t involve addition or subtraction, but it is very helpful.
A SWOT analysis lists the good and bad things about your business, both from an
internal and external viewpoint, by identifying your business’:
• Strengths
• Weaknesses
• Opportunities
• Threats
A SWOT analysis forces you to think about the future.
You know how your business is doing today, but do you know where it will be tomorrow?
This process will help you figure it out and—more importantly—create a strategic plan for it.
If you’re starting a new business, a SWOT analysis can help you decide on a business model and gain
competitive advantage.
CREATE A SWOT ANALYSIS MATRIX
Your first step is to create a SWOT analysis matrix
The 2 x 2 matrix has one box for each area: Strengths, Weaknesses, Opportunities, and
Threats.
Strengths and weaknesses are internal factors, while opportunities and threats are external
factors.
Strengths and weaknesses mostly focus on the present, while opportunities and threats
mostly focus on the future. What is happening versus what could happen.
Strengths and weaknesses are under your control. It may be difficult, but you can change
them over time.
Company culture/Reputation/Customer list/Geography/Staff/Partnerships/Intellectual
property/Assets
Conversely, opportunities and threats are typically outside of your control. You can try and
plan for them or influence a positive change, but at the end of the day, it’s not up to you.
Regulation/Suppliers/Competitors/Economy/Market size/Trends/Financing/Weather
STRENGTHS
These are positive factors that affect how your business performs.
They are internal strengths within your control that reflect your current situation.
To discover your strengths, think about the following questions:

• What are we good at?

• What do we do better than anyone else?
• What is our competitive advantage?
• What do we do that no one else does?
• What resources do we have at our disposal?
• What are our ecommerce company’s advantages?
• What advantages do our employees have?
• What valuable assets does our company have?
• What do our customers like about our business?
WEAKNESSES
These are negative, internal factors that affect how your business performs.
Although they may be difficult to change, they should be within your control.
Some things for you and your team to consider include:

• What are we bad at?

• What do our competitors do better than us?
• What do our customers complain about?
• What disadvantages does our team carry?
• What is holding us back?
• Which resources are we lacking?
• What could we improve?
OPPORTUNITIES
These are external opportunities that could affect your business in a positive way.
They may be largely out of your control, but you can choose to leverage them. Some
questions to consider are:

• What potential regulation changes could help our business?

• Is the market changing in a favorable way?
• Is the current economy going to affect us in a positive way?
• What opportunities have we not pursued yet?
• What new opportunities are becoming available?
• Is our cost of goods going down?
• Is there a way for us to acquire useful resources that we do not already have?
THREATS
These are external factors that could affect your business in a negative way.
They may be largely out of your control, but you can create a contingency plan to
minimize the damage.
Consider the following:

• Who are our existing competitors?

• What new entrants to the market could threaten our ecommerce business?
• Is our market size declining?
• Is the industry changing in a way that could negatively impact our business?
• Is our cost of goods increasing?
• Is a supply we rely on becoming scarce?
• Are regulations changing in a way that could hurt our business?
• Is our manufacturer unreliable?
FUND YOUR BUSINESS
There are many different ways to fund your business—some require considerable effort,
while others are easier to obtain. Two categories of funding exist: internal and external.
Internal funding includes:
• Personal savings
• Credit cards
• Funds from friends and family
If you finance the business with your own funds or with credit cards, you have to pay the
debt on the credit cards and you’ve lost a chunk of your wealth if the business fails. By
allowing your family members or friends to invest in your business, you are risking hard
feelings and strained relationships if the company goes under. Business owners who want to
minimize these risks may consider external funding.
• External funding includes:
• Small business loans
• Small business grants
• Angel investors
• Venture capital
• Crowdfunding
TYPES OF BUSINESS START-UP COSTS
The goal of any business is to make money.
There are two sides to this coin: financial literacy and securing funding (if it's needed).
Let's start with the first one. There are plenty of businesses you can start with minimal
startup costs, but others will require money for inventory, equipment, or physical space.
A clear view of your total investment —is a must for helping to make important projections,
like when you’ll break even.
Remember, if the math doesn't work, your business won't work. Bookkeeping needs to be
one of your primary financial tasks as soon as you’re ready to start making purchases for
your business.
Planning your business budget is
one of the most stressful parts
of entrepreneurship.
But being realistic about
estimating your business startup
costs — and how much money
you may need to borrow right
away — will go a long way
toward getting your company up
and running.
Marketing mix is a set of critical elements THE MARKETING MIX
used by a brand to build the company’s
market presence.
Marketing mix can help you determine how to
bring a new product to the market or test your
current marketing strategy.
With the help of the model, businesses can
develop advantages, minimize drawbacks,
improve competitiveness and adaptability and
increase collaboration between departments
and partners.
Companies utilize the marketing mix to learn
about the customers’ requirements, the ways
their business satisfies these needs, and how
they differentiate themselves from the
competition.
So now we need to define the tactics to make
this plan happen and that’s where the
extended marketing mix (7Ps) comes in.
 PRODUCT
Product is what satisfies consumers’ needs and wants. It can be tangible (an
actual product) or intangible (a service, ideas or experiences): what is being
sold?
What are the main components of a product?
Quality/Image/Brand/Features/Variants/Mix/Support/Customer service/Use
occasion/Availability/Warranties
The five product levels model gives an idea of how much a company can
improve a product:
Let’s consider a hotel: the core is represented by a place to rest or sleep; the
actual product can be towels, a bed, a bathroom and a closet; the expected
product means taking for granted the presence of clean sheets and bathroom,
a soft mattress and so on; the augmented product can be the Wi-fi, a free map
of the town or room service; finally, the potential product can be made by
placing new treats for guests in the rooms, including a spa or a gym and so on.
 PRODUCT/SERVICE LIFE-CYCLE
This theory breaks down a product/service life-cycle in five stages
according to the revenue generated over time:
Development: companies develop new products and services all the
time, but only a small percentage reaches the market after the validation
stage;
Introduction: the offering is promoted and consumers become aware of
its existence. Revenues are still low, but they are going to grow
exponentially in the next phase;
Growth: the demand and awareness grow. Sales increase on par with
profits and production costs decrease.
Maturity: the offering is now well known, the demand tends to stabilize
and sales slow down.
According to Marketing and management of Kotler and Keller, it can
expand the market (market modification), change or improve the quality,
features or style of the product/service (product modification), and edit
non-product-related elements such as communication, price and
distribution;
Decline: as soon as the offering becomes obsolete, sales and revenues
drop till it’s not convenient to continue making the product/service
anymore.
PRICE
Price is the cost to buy a product/service.
Price is critical for a marketing mix, because it is the only element that generates
profit. All the other marketing mix dimensions produce costs.
There are many factors that affect price, some of the internal ones are:
• Fixed costs (they don’t vary based on the production output, e.g.: lease payments,
insurance, property taxes, interest expenses, depreciation...);
• Variable costs (they vary based on the production output, e.g.: employees, raw
material, packaging...);
• Companies objectives; /Production capacity; / Product life-cycle; / Brand.
Instead, external influencing factors can be:
• Market coverage (percentage of the market covered with a marketing strategy);
• Market share (resulting percentage from the difference between a company’s sales
and the total amount of product/service sold in the segment);
• Competition; /Target segment; /Economic context; /Demand; /Laws, regulations and
taxes; /Substitutes;
• Distribution channels (presence or absence of intermediaries);/ Culture.
PRICING STRATEGIES
There are two variables that allow marketers to set a price: value and costs. Some of the pricing strategies could be:
• Maximizing profits (revenues - costs);
• Short-term survival: a company tolerates losses for a short period in order to win the competition or resist from an attack of
competitors;
• Maximizing ROI (profit ÷ costs);
• Status quo: keeping the market stable;
• Preventing new entrants: avoiding competitors to enter the market;
• Cash flow;
• Keeping a high quality of the product/service.
There are mainly five pricing strategies:
• Price skimming: companies set a premium price to attract high-end consumers who don’t mind dealing with expensive prices;
• Penetration pricing: companies set low prices to penetrate a competitive market. It can also be used to attract consumers who
seek convenience;
• Prestige pricing: it is a psychological strategy based on the principle that people make assumptions on the quality/price ratio and
don’t buy if the price is too low. It happens with luxury brands, just think of a $10 Gucci bag: it doesn’t have value at all. People
buy expensive and luxury brands to stand out and be recognized as members of a certain exclusive social class/category;
• Competition-oriented pricing: companies study and apply competitors’ price;
• Psychological pricing: companies set prices slightly lower the rounded number (e.g.: all prices that end with 9).
PEOPLE
People are fundamental in delivering any product or service.
They represent everyone involved during the buyer’s journey, buyer themselves
included: employees, partners, customers and even the relationships established
among them.
Mood, character and behavior adopted during a service delivery affect the quality
perceived by the customer. If the offering expects to satisfy more consumers
simultaneously, they can influence their experience with each other. Just think of being
at the cinema. If people start talking during a movie, you get upset and can’t follow the
story anymore.
Some of the variables that affect this dimension are:
• Employees recruitment and training;
• Uniforms;
• Scripting;
• Queuing systems and wait management;
• Handling complaints and understanding service failures;
• Managing social interactions.
PLACE
When the business makes marketing decisions about the place, the company considers
the best locations for sale and the ways to deliver the product to the market. Some
points you must be kept in mind are below:
Trade channels/ Sales support/Channels numbers/Segmented channels
The primary business objective is to make the product accessible for the customers and
promote it to the people motivated to purchase it. This can relate to offering the product in
some physical stores or placing it online, on TV shows, or in movies to attract attention.
The questions to take into consideration before choosing the location for selling your product
are the following:
• Where do potential customers go to find your goods or services?
• Which online and offline stores sell your product?
• What can you learn from your competitors about the physical presence and distribution of
their goods or services?
• Do you sell directly to your customers, or do you have to go via intermediaries?
• What are the best ways to find suitable distribution channels?
Place is a marketplace where people can buy a product/service. It can be physical, like a store,
or intangible, like an e-commerce, what matters is that it provides access to the
product/service.
IS IT A TREND, FAD, OR GROWING MARKET?

One of the best ways to start a business is to tap into the market before you start. The
trajectory of a market matters more than its current state. If you want your business to
go the distance, remember it's not only critical to understand the demand for a
category today but to know how it might trend in the future. Does your product or niche
fall into a fad, trend, stable, or growing market?
Fad. A fad is something that grows in popularity for a brief period of time and fades out
just as quickly. A fad can be lucrative if your entry into the market and exit are timed
perfectly, but this can be difficult to predict and a recipe for disaster.
Trend. A trend is a longer-term direction that the market for a product appears to be
taking. It doesn't grow as quickly as a fad, it lasts longer and, generally, it doesn't
decline nearly as fast.
Stable. A stable market is one that is immune to shocks and bumps. It is neither
declining nor growing but maintains itself over long periods of time.
Growing. A growing market is one that has seen consistent growth and shows signs of a
long-term or permanent market shift.
PROMOTION
So we have a fantastic product, at an appealing price, available in all the right places, but how do
customers know this?
Promotion in our marketing mix is about communicating messages to customers, whichever stage
they are in the buyer journey, to generate awareness, interest, desire or action.
It varies according to the segment served and marketing strategy adopted.
It includes activities such as branding, advertising, PR, corporate identity, sales management,
special offers, and exhibitions.
Advertising is good for raising awareness and reaching new audiences, whereas personal selling
using a sales team is great for building relationships with customers and closing a sale.
If your customer is a regular on Instagram then that’s where you need to be talking to them!
Some points you must be kept in mind are below:
• Marketing communications
• Personal promotion
• Sales promotion
• PR
• Branding
• Direct marketing
GO DIGITAL
With proper market research, a good business name and effective business plan in place, it is
time to go digital.
However, an entrepreneur should be aware that technology is disrupting most aspects of our
lives in more ways than one. Any business today needs to have an online presence to reach
out to a global audience.
The digital footprint of an organization cannot be ignored.
You can begin your Digital Marketing journey with a good business website and well articulated
Social Media strategy: Facebook, Istagram, etc.
In fact, customers now expect the average business to have a presence on major social
networks.
You should be very smart to make content! Why? When people share your site’s content/product, they’re
indirectly recommending what you’re offering. This help your site’s reputation and Google
takes note of this.
93% of online experience starts with a search engine, be it Google, Yahoo or Bing etc. Now if
you have your business online but it does not appear on first, second or third page, then it’s
as good as offline.
A research conducted by Chitika, an online ad company, found that the results on the first
page of Google Search Engine Return Page (SERP) enjoy around 92% of the total traffic of
search queries.
Furthermore, the study put the traffic of visitors that end their search query in the first page
of Google results at 33%. While the second and third pages gets 18% and 11% respectively.
NETWORKING
In today’s world networking is an important factor for being successful
Networking can help an entrepreneur connect with investors or with people who have the right
skill-sets to maybe partner with you or work for you.
Networking also helps you connect with potential customers either directly or through common
connections.
Business networking might allow you to create awareness of or keep abreast of the latest trends or
technology in your industry.
A network can also provide you with professional mentors or contacts who might be able to assist
you with problems you might need help with.
The most important skill for effective business networking is listening; focusing on how you can
help the person you are listening to rather than on how they can help you is the first step to
establishing a mutually beneficial relationship.
Networking builds confidence, in that that your business and the methods you have employed to
run and manage it are competitive and comparable to similar businesses.
Much of local business is still done on a handshake basis, and the best way to network with other
local business owners and entrepreneurs is through face-to-face meetings and local business
groups.
You should not only attend the meetings of your networking group regularly but go prepared to
offer something of value to the group.
PROCESSES

Processes are all the mechanism, planning and decision making that ensure a smooth
delivery of a product or service.
Some of the variables included are:
• Designing processes;
• Blueprinting (or flowcharting): it enables marketers to identify bottlenecks and
contact point with customers;
• Deciding between standardization versus personalization;
• Locating fail-points, critical incidents and system failures;
• Monitoring and tracking service performance;
• Analyzing resources requirements and allocation;
• Creating and measuring key performance indicators (KPIs);
• Aligning with guidelines;
• Preparing operational manuals.
PHYSICAL EVIDENCE
Physical evidence represents all the environmental elements that surround consumers
during a service/product delivery. They are characterizing factors that can positively or
negatively impact the delivery experience.
For example: interior design, colors, layout, equipment, furniture or facilities.
This dimension also comprehends the experience before and after a transaction. For
instance, invoices and souvenirs are physical evidence underlying the fact that the product
or service was delivered.
The physical evidence is the service delivered and any tangible goods that facilitate the
performance and communication of the service.
It is the proof that a seller has provided (or not) what a customer was expecting. A physical
evidence of an actual product is the good itself. According to this framework, here are
some variables:
• Facilities (furniture, equipment, access...);
• Spatial layout (functionality, efficiency...);
• Signs (directional signage, symbols, other signs);
• Interior design (furniture, color schemes, layout…);
• Ambient conditions (noise, air, temperature...);
• Design of material (stationery, brochures, menus...);
• Artifacts (souvenirs, mementos...).
 THE 7 ''RIGHTS'' OF LOGISTICS
1) A well-designed product can significantly facilitate logistics when
they ensure a specific level of standardization.
2) After being created, the right products must be delivered to the
right customers.
3) The right quantity plays an important role in logistics. Knowing the
exact quantity and meet the demand is the key point for a
manufacturer in keeping reputation and avoid losing money.
4) The quality of the product should be maintained, and the
packaging must be intact when reaching the end user or the
customer.
5) The next important factor is to make sure the products are being
delivered to the right destination. In short, a supply chain managers
should remember to deliver the Right
6) In order to maintain competitive advantages in the industry, there product to the Right customer, in the
should be no delay delivering the products to end consumers. Right quantity, in the Right condition, at
7) products should be shipped at the most suitable cost. the Right place, at the Right time and
finally at the Right cost.
Thank you for your attention!)

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