Starting a business is a systematic and purposeful activity that requires careful consideration of various factors. The process of setting up one's own business is called entrepreneurship. Several key factors must be considered before starting a business.

Selection of type of business is the first important factor. The entrepreneur must decide the nature and size of the business enterprise. Location of business enterprise is another crucial factor. Any mistake in this regard can result in high cost of production and inconvenience in getting production inputs or serving customers. Availability of raw materials, labour, power supply, and services like banking, transportation, and communication must be considered.

Financing the proposition is essential as capital is required for investment in fixed assets like land, building, machinery, and current assets like raw materials and stock. Capital is also needed for day-to-day expenses. Physical facilities including machines, equipment, building, and supportive services must be arranged based on nature and size of business, availability of funds, and production process.

Competent and committed workforce is necessary to convert physical and financial resources into desired outputs. The entrepreneur must identify requirements of skilled and unskilled workers and managerial staff. Tax planning has become important as tax laws influence almost every aspect of business decisions.

Finally, after decisions on all factors are taken, the entrepreneur can proceed with launching the enterprise, which involves mobilising resources, fulfilling legal formalities, starting production, and initiating sales promotion campaigns.