When you start a business, you’re not just doing it for yourself; you’re also bringing money into your community. This can help reduce unemployment and boost the economy. Then, as your business grows, you may need to hire more employees, which can further boost the economy. Plus, you’ll pay taxes that can be used for things like improving infrastructure and funding other projects.
Entrepreneurs who start businesses from scratch generally have a great idea for a product or service that will generate profits, and they need to turn this into a fully-fledged company. This involves numerous organizational tasks, including carrying out a market study and drawing up financial forecasts. It also involves establishing the legal form of the enterprise (corporation, partnership or sole proprietorship).
The concept of business creation is based on the theory of innovation introduced by economist Joseph Schumpeter in his early 20th century writings. According to this theory, entrepreneurship creates new combinations of currently existing production factors, which lead to the development of entirely new industries. For example, the combination of a steam engine with current wagon-making technologies led to the development of the horseless carriage.
Starting a business is often risky, and only about 20% of all new small businesses make it past the first year. And during a crisis such as the COVID-19 pandemic, it can be even more difficult for entrepreneurs to succeed. That’s why it is important to have the right support system to help entrepreneurs succeed, which is where the IPAG business school comes in.