We have defined business as the provision of a solution such that people are willing to exchange value for whatever solution that is being offered. What makes a business function in any balance sheet is the capital that it has. Many a time we look for millions of dollars before we start businesses or rather are constrained to the very idea that we need an investment first in order for us to have capital. In this article we shall be looking at the different considerations that an entrepreneur can have towards their consideration of what capital is.
Idea
Capital is also an idea. In order for an investment to be made into a business one must consider the idea, so in this case the idea is the actual capital. An idea such as Facebook, Instagram, Dotdash and other numerous ideas is the capital. When KFC was started, the capital was not the restaurant but rather the idea of a fast food and the recipe. That is why you see recipes for KFC, Coca Cola, Pepsi and such are protected. The growth of Alibaba or eBay is simply an idea that was implemented over time, which brings us to another consideration of capital which is TIME.
Time
Everyone has time on their hands, that is the essence of life. Life is time and so is business. The time that you have is capital, what then differentiates the value of that time is what you do with it. A website that loads faster that another website has more capital than the slow website. A restaurant that serves quality food in time better than other restaurants has more capital than other restaurants. The way people utilize their time determines the level of value the business will have or create. Time is very valuable and is one of the more critical capital assets that a business can have. A business that fails to use its capital in time will eventually fail.
Environment
The state of business is also determined by the environment that it is operating in. A good conducive environment will encourage the growth of a business and enable it to make profit. The kind of environment that you are in will determine the best type of business that one can operate in. A good environment is good capital on its own that not only attracts investment but encourages the growth of business.
Resources
What you own in your hand or life is your capital. What you have or have control over is your capital. What you have influence over is also capital depending on your level of influence. Before you plan or run a business first understand the resources that are in existence. Our ability to use the resources that we have influence or control over is the creation of value that is needed to ensure that a business runs to its potential. Before one even uses the resources it is a capital reserve waiting to be utilized, you just need to be able to use it.
+ There are no comments
Add yours