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Starting Business - Essay Example

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Starting Business

Technology-based start-ups are generally strategically and operationally agile which give rise to innovation. On the other hand, start-ups ventures have scarcity of resources and often struggle to arrange funds and other operational requirements that they need to get their ideas to market.
Establishing a new company presents a lot of challenges especially in its early stage. Principal reasons of opening a company in 2002, according to National Institute of statistics and economic surveys (INSEE) were:
Buyout of a company, though less riskier task, involves a lot of intricacies. Raising the funds is major challenge of any buyout. Following elements make a buyout a cumbersome and time consuming business process:
Finance: Financing a buyout involves various issues such as the true value of the company and evaluation of the companies involved and the market credibility of buying company which determines the amount they can raise from market and as debts from banks. There are various ways to raise finances for funding a buyout such as debt funding, private equity financing and vendor financing.
A buyout involves complex taxation issues. No two buyouts are quite the same and their tax implications vary correspondingly. The buyout benefits will diminish if proper consideration is not given for its tax consequences for individual investors, the buyout company, and the vendor.
Cultural assimilation: adoption of employees to the management owner plays an important role in success of a buyout. These issues become starker if an established company is buying an already established company.
Retaining existing competent workforce
Retaining key personnel of the company being purchased is also an important issue which needs to be addressed in an urgent basis. Rumors may spread that the business is about to close, in this case some of the capable workforce may leave the company. Assuring workforce that their interests will be taken care of requires a clear communication with employees and their associations. Employee's protests, in several cases, can stall the buyout process.
Some of the other concerns related to buyout of an existing business include the potential for inheriting:
An obsolete product or mature market: If a proper assessment is not done there are chances that you purchase a company whose products are not in demand or market for the product that company is producing is mature. This makes the purpose of a buyout obsolete.
Existing operational inefficiencies, obsolete equipment, or a bad optimal location for the business: This issue again adversely affects the purpose of a ...Show more

Summary

Economic scenarios are changing very fast as is evident from recent number of startups and merger and acquisitions activities. Recent studies by OSEO show that about 700,000companies will be for selling within 15 years in France itself because of demographic issues and 233 000 companies (+3,77%) were created in France in 2006 ( sources APCE)…
Author : pedro34
Starting Business essay example
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