The economic benefits of new firm creation include increased productivity, job creation, and the creation of new economic sectors. However, the costs of starting a new firm are substantial in both time and money. Moreover, about two-fifths of start-up efforts do not reach profitability. Therefore, policy makers must weigh the benefits and costs of increasing business creation. To do so, it is critical to gain a precise understanding of the business creation process.
Business creation involves a series of steps, including carrying out a market study and drawing up financial forecasts. It also includes choosing a legal form and making other important decisions. It is essential to plan well and follow the right procedures, as mistakes in this area could have serious consequences for the new business.
Besides monetary rewards, there are other motivations for a person to set up a new business. These might include personal fulfillment, such as the opportunity to conquer an unknown territory, or they may be related to values and ideals, such as environmental sustainability or a desire to provide an innovative product to the marketplace.
The authors of this book offer a rich description of the business creation process that is useful for scholars interested in entrepreneurial theory and practice, as well as for those involved in adjusting public policies to promote start-up activities. This text will also be a helpful supplementary textbook for upper division and graduate courses in business plan development and research methods.