Launching a business requires a fully funded budget. In the US, 99% of businesses fall into the category of small businesses, according to Statista, and most use bootstrapping, credit cards, or a business loan to start their company, not startup business investors. Television doesn’t make it sound that way with its focus on angel investor groups on TV shows like “Shark Tank.” Those shows make starting a business more complicated than it is.
US Business Reality
More than 70% of US businesses qualify as sole proprietorships, meaning the owner operates the company without employees, according to USA Today. The business might hire independent contractors to assist with special projects, but there’s no one employed by the small business. Most of these businesses consist of cafés, food trucks, freelancers creating blogs, graphics, or websites, and business consultants.
A New Business, Not a Startup
According to Statista, the term startup refers to a company in the stage of its initial operation that may receive venture capital funding. Most of these companies aspire to become a unicorn startup, a new company with a valuation of $1 billion or more. Examples of companies that attained unicorn status include Airbnb, Instagram, and SpaceX. A startup typically offers a unique product or service that can serve a wide number of locations.
Types of Investors in Startups and Businesses
The type of business you want to start determines the type of funding you pursue, and so does your company’s development stage. A person opening a café might obtain a loan from their parents, or their siblings might invest in it. Either way, the owner would make monthly payments, either to pay back the loan or, ideally, to pay a percentage of profits to investors.
Someone launching a new medical device would find a startup. Initially, they might use their savings, a credit card, or a business loan to create the company, conduct initial research and development, and build their minimum viable product (MVP). When they pitch venture capitalists (VCs), they present the MVP and show how it works. VCs, investors looking for projects to fund at their outset, might turn into angel investors down the line, but it takes years before a company can viably find an angel investor.
Steps to Take to Start a Business
Joining the U.S. economy as a small business requires know-how, fortitude, and skills. According to the U.S. Small Business Administration, small businesses comprise 99% of American businesses. Let’s consider some of the small business must haves your new company needs to succeed.
Research and write your business plan. This process includes competition analysis, SWOT analysis, and your business’s budget, among other items. Whether you apply for a business loan, go the angel investors, or venture capital route, you need a well-written business plan.
Before starting the process of operating your business, complete your startup filing. That term refers to the paperwork required in your state and municipality for operating a business which may include obtaining a business license or other necessary credentials. Depending on the kind of business you operate, you may need other licenses, too.
Going from startup to enterprise doesn’t happen overnight, but starting the right way as a new business owner can help you avoid needing a pay day loan along the way. Marshal all of your tenacity and determination. Merge it with your skill set and hire individuals who possess the skills or talents you don’t. You’ll also need the right personality type for owning and running a successful business.
Small businesses are considered the backbone of America and are what many financial analysts predict will be the vehicle to drive us out of this financial downturn.
Starting your own business, whether it is small or large, is no small feat. There are 27+ Million Small Businesses in the US, and of those businesses, only 51 percent will still be functioning successfully after five years. While there are no clear cut templates for how to successfully own and operate a business, there are a few tips for business success that you should live by to promote success.
While most people are looking for concrete business tips or business tactics to foster business success, it really starts with your mental attitude. The first and most important business tips lie in your passion for your business. Remember why you started. If your passion starts to wain, take a moment to remember all of the reasons you started the business.
Be sure to maintain a strong work ethic. It is easy to take a more laid back approach, especially when you are self employed, but your employees will follow your lead. It will also help you beat your competition by outworking them! The old adage that hard work pays off is true, especially in terms of a start up company.
Other important business tips? Be able to rebound quickly from set backs. There will be plenty of ups and downs as you build the business and learn by trial and error. Learn from the setbacks and move on.
Business success tips come in all types, and are really a matter of opinion. The truth is, running a business is a learning process. While there are tons of great resources for business tips online, trial and error is the best way to learn. Failure is an opportunity to learn.