Use Wisdom When Starting Your Small Business
The past year-plus saw some significant disruptions to life, school, work, society, and businesses.
Some of the disruptions experienced have already subsided. Schools are back in-person for the most part, large portions of society from restaurants, bars, and shops have reopened, and more.
That said, there are some disruptions still going on and will continue for some time.
People got used to working from home and others decided to leave the general workforce in general. In fact, over 4 million people left their jobs in the month of September while over 4 million businesses were started over the past year.
Reasons People Are Attracted To Starting Their Own Business
Some of the more significant reasons (leaving out the Pandemic) that people started new businesses are;
- Digital Services and Products: One of the largest percentages of new businesses are those that are digital services and products sold online. There are a variety of reasons for this trend, but the low cost of start-up, the global reach for potential sales, and the flexibility online businesses offer were some of the more attractive reasons. Digital services allow you to take some of your expertise and sell your skills at a price that you can negotiate with your clients.
- Low-Cost of Entry: Many businesses that were created over the past year and a half had one thing in common, a low-cost point of entry. What that means is that most new businesses were started without the need for much in the way of assets by the ownership before starting. Keeping your start-up costs low guarantees a quicker turn to profit, which can be crucial if your side hustle is to become your main income.
- Creativity: The ability to be flexible and adaptable is a highly regarded aspect of a business and the creativity that ownership provides is a very attractive factor. Whether operating as a freelance or professional service, to online sales, finding creative outlets that benefit the individual ownership was extremely attractive. Having input over the how and why things are done is a very attractive position for many individuals as they start out on their entrepreneurial dream.
- Independence and Control: The dream of being one’s own boss is the goal of many, many employees. The disruption caused by the Pandemic accelerated the decentralized concept of work and highlighted the ability of individuals to exert independence and control over their work.
- Direct To Consumer: Selling direct to consumers rather than a third party is one reason why individual ownership is so attractive. Paired with digital services and products and a direct-to-consumer model allows the business to develop future relationships with customers as well as exert more individualized control over brand recognition.
Regardless of the type of business you choose, there are further steps you need to take to better position your business for success. Taking some of the proactive steps listed below will help position your business to avoid a few of the missteps and hiccups that others will experience as they begin their business journeys.
Avoid Costly MIstakes Starting Your Business
Choosing the type of legal entity for tax purposes is an important first step. There are sole proprietorships, doing business as (DBA), partnerships, limited liability companies (LLC), and various types of corporations. Selecting the legal entity that fits your taxation needs, liability protections, and benefits is crucial.
While you choose the legal entity that makes sense for the type of business you will operate, you should apply for an EIN in lieu of using personal social security numbers as your business. There are numerous benefits of an EIN, from protecting personal identity to lending credibility, accelerating business loan processing, and more.
Once you decide the type of business and legal entity your new small business will become, structuring your organization should include room to hire out third parties to assist with business needs will save you time, energy, and money.
For example, you may wish to hire out marketing for your services, or bookkeeping to organize your books and taxes. These third-party services will allow you more time to dedicate to your strengths and assist with building your brand.
Outsourcing allows you to hire experts at a reduced cost to your operations, guaranteeing that the necessary work that has to be done correctly and without errors will happen.
Different types of businesses have different liability exposure. Choosing the right type of business insurance, whether it’s workers compensation to general insurance, and even an umbrella insurance policy to protect your interests is worthy of consideration.