Deciding to set up a business 

1.- The initial idea

Each business project is developed around an idea that emerges once a business opportunity has been detected. The idea of how to set the business up will vary depending of the circumstances of the person/people involved. There are many factors that lead a person to lean towards a certain type of business. Generally speaking, the factors that determine the choice are:

• Repeating other people's experiences: this is an automatic reflex of new businesses that frequently occurs during times of economic growth.
• New business opportunities in undersupplied or newly-created markets or those showing a high rate of growth.
• Technical knowledge on specific markets, sectors or businesses.
• The experience of the future entrepreneur, who was first a worker or a manager in another company and who know wants to go out on his/her own.
• In the case of an innovative product that is expected to create demand.
• In the case of a relatively easy business or activity that will allow anyone to set themselves up.

2.- Business plans

This is a work document that develops the business idea the person hopes to put into practice. It should be an open, dynamic document that is updated as the idea grows. Flexible and transparent, a business plan should constantly attract the attention of the reader. As it is so variable, it cannot be adjusted to fit any one standard model, nevertheless, it will include the following aspects as a general rule:

• A description of the company, business or business initiative
  • Reference of the experience and the aims of the promoters
  • Technical description
  • Geographic location
  • Economic-financial structure
  • Organizational chart for human resources
  • Legal structure
• Definition of the product or service to be provided
  • Description
  • Needs covered
  • Differences with the competition's products
  • The existence of a right regarding the product or service to be marketed
• Plan of the sales aspects
  • Market analysis. Market study
  • Marketing plan
  • Setting up distribution networks
  • Purchasing plan

The Directorate General of SME policy offers users an interactive tool that shows how to draw up a Business Plan [es], as if it were a game.

3.- Choosing the type of company

• Factors to bear in mind
  • Number of partners
  • Amount of share capital
  • Requirements for establishing the company
  • Tax requirements
  • Social Security Scheme
  • Hiring
  • Liability to third parties

Type of company depending on the particular characteristics [es]