Management Notes

Reference Notes for Management

Which one of the following is the step involved in setting up a new enterprises?

Which one of the following is the step involved in setting up a new enterprises?


A. Creating a business plan
B. Making a product choice
C. Selecting the location
D. Setting up infrastructure

The Correct Answer Is:

D. Setting up infrastructure

Setting up a new enterprise involves a series of crucial steps, each contributing to the overall success and sustainability of the venture. Among the options provided, the correct step is D. Setting up infrastructure.

This is because establishing the necessary physical and technological foundation is fundamental to the functioning of any business. Let’s delve into the reasons why this is the correct choice.

D. Setting up Infrastructure:

Infrastructure encompasses all the physical assets and systems required for the smooth operation of a business. This includes facilities, equipment, technology, and other tangible resources. Without a properly functioning infrastructure, a business would struggle to deliver products or services effectively.

For instance, a manufacturing enterprise would need a suitable production facility, machinery, and utilities. Similarly, a service-oriented business would require the necessary office space, computers, and communication systems.

Therefore, setting up infrastructure is a foundational step in the process of establishing a new enterprise.

Now, let’s examine why the other options are not the correct steps in the process:

A. Creating a business plan:

While creating a business plan is undeniably crucial in the startup process, it typically precedes setting up the infrastructure. A business plan outlines the goals, strategies, financial projections, and operational details of the enterprise.

It serves as a roadmap for the business and guides decision-making. Without a solid business plan, it would be imprudent to invest in infrastructure.

Creating a business plan involves meticulously outlining the goals, target market, competition analysis, financial projections, and marketing strategies. It serves as a comprehensive blueprint for the business, aiding in informed decision-making and attracting potential investors.

However, it is a precursor to setting up infrastructure, as a solid plan is needed to determine the type and scale of infrastructure required.

B. Making a product choice:

Choosing a product is indeed a critical aspect of starting a business, but it comes after setting up the infrastructure. Once the infrastructure is in place, the entrepreneur can move forward with the production or delivery of the chosen product.

Selecting a product should be based on market research, demand analysis, and the capabilities of the established infrastructure.

It involves evaluating factors like market trends, consumer preferences, and competitive offerings. However, this step follows after setting up infrastructure because the chosen product’s production or delivery relies on the available resources and facilities.

C. Selecting the location:

Choosing an appropriate location is vital for certain types of businesses, particularly retail or service-oriented enterprises. However, this step does not take precedence over setting up the infrastructure.

The location should be determined based on factors such as target market accessibility, competition, and cost considerations. Once the location is chosen, the necessary infrastructure can be established accordingly.

Nevertheless, choosing a location is a subsequent step, contingent on having established the necessary infrastructure. The infrastructure’s capabilities and requirements influence the suitability of potential locations.

In conclusion, setting up infrastructure is the correct initial step in the process of establishing a new enterprise. Without a solid physical and technological foundation, a business would face significant challenges in delivering its products or services.

While other steps such as creating a business plan, making a product choice, and selecting a location are also crucial, they come after the infrastructure is in place. Each of these steps contributes to the overall success and sustainability of the enterprise, but they follow a logical sequence, with setting up infrastructure as the starting point.

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