Thinking of starting a business this year? You are in good company. In fact, 2 in 5 Americans plan to start their own business by 2023. Of these, 32% will live the entrepreneurial dream for the first time. If you’re new to business ownership, there’s a lot to consider, but don’t let that discourage you.
We’ve got the tips you need to start the year (and your new business) off right.
Find funding immediately
One of your biggest questions before you get started is probably, “How am I going to pay for this?” Depending on your personal finances, you may be able to fund some of the start-up costs of your business, but you’ll likely need some (or a lot) of support along the way. Wondering how to get financing? Let’s dive in.
Everyone wants free money, but be aware: the competition for business grants is fierce. Grants do not have to be paid, but the application process can be difficult. However, it’s always smart to look for grants that your business may qualify for. Check with the US Small Business Administration and your local Chamber of Commerce and other nonprofit organizations that support small businesses.
Bank loans are an easy way to secure financing for your new business. However, you still need to go through the approval process and find a repayment plan that works with your current finances. To get the best rates and ensure approval, it’s helpful to have registered your business as a legal entity (more on that in a moment), have a dedicated business checking account and have evidence of clearly separated personal and business finances .
Credit for small businesses
Similar to a credit card, a small business line of credit allows you to borrow a certain amount and pay it back over time. Like a loan, you’ll have to go through a similar approval process, but keep in mind that the interest rates aren’t always as favorable, so you could end up paying a lot more.
If you need a large amount of financing that you don’t want to pay and are willing to share profits or give up a stake in your business, you can look to an angel investor or a venture capital fund. There is a lot of competition, so you can benefit from looking for platforms that match startups with investors, such as FundersClub and Wefunder.
Crowdfunding brings your great business idea directly to the people. You can start simply by asking friends and family for support or by using a crowdfunding platform like Indiegogo, Patreon or SeedInvest.
Protect your new business with a legal entity
Once you’ve made a plan to finance your business, it’s time to take one of the most critical steps in making your business legitimate: applying for a legal business entity. While it’s not technically a requirement, and you can operate your business as a sole proprietor without a legal structure, it’s always the recommendation for new business owners. Because? Because registering your company brings many advantages, such as:
- Liability protection that protects your personal assets
- Easy to secure financing, business bank accounts, credit cards and more
- Protection of your privacy and personal information
- The legitimacy that makes your business more reliable and attractive
While you can choose the business entity that best suits your needs, the most common is an LLC. It is valued for its flexibility, cost-effectiveness and low compliance requirements. 5.4 million business formations were registered in 2021, the most recent year on record, more than at any other time in history.
Start building your brand and online presence
Your next step in getting closer to launching your business in 2023 is to focus on creating a brand that is trustworthy and recognizable. And of course, the best way to do this is to create an online presence.
First, you’ll want to learn as much as you can about what you’re getting into. For most companies, this means researching three key areas:
- Your customers
- Your market
- Your competitors
The best way to start your search is online. Look for trends in your industry, follow the competition on social media, and pay special attention to what customers are saying about these rival brands.
Protect your brand
You’ve already taken a big step in reducing your risk by presenting yourself as a legal business entity, but there are other ways to prevent your brand from being stolen by competing companies. Looking to register a trademark for your name, logo or even slogan. A trademark is the only sure way to prevent other companies from using your intellectual property.
Create your website
Recent data shows that 71% of small businesses have a website. It doesn’t matter if you are planning an e-commerce business or not; to really thrive, you need a website. Websites help your business get found, build your reputation and succeed. However, you don’t need to hire an expensive developer; you can usually make your website with a platform like Wix or Squarespace.
Just like having a website, being on social media is a must. One of the key ways to get new customers is to hang out wherever they are. And in this digital age, that’s on social media. Choose the platforms where you’re most likely to find your ideal customers, then see how your competition is engaging.
Keep up with the latest changes in the economy
To ensure the success of your business, you need to be ahead of the forecast for the economy in 2023. Nothing says you shouldn’t start a business next year, but it pays to be prepared. For 2023, the Harvard Business Review predicts a bumpy ride, thanks to inflation, high interest rates and general uncertainty.
Although growth is expected to be slow, markets remain bullish, and actions taken by the federal government could serve to reduce inflation and maintain jobs, putting the US on a path to recovery and economic growth.
There are many uncertainties that come with starting a business, but there are also countless advantages. With the right planning and preparation, you can make 2023 the year you achieve your entrepreneurial dreams.