How to Start a Business

How to Start a Business

Starting a business can be one of the most exhilarating and rewarding events in your life. It can completely change your lifestyle and the impact you make on the world. It also comes with risk, and generally, an unforeseeable magnitude of hard work.

How to Start a Business

Infographic by David Foster

Along the way, you’ll be surprised by hidden variables, like market changes, regulatory issues, funding glitches and other issues. The best way to defend yourself is to have a solid plan, reserve more time and money than you think you’ll actually need, and ask for help from those who have been there before. Once you figure out your legal structure, register your business name, get a tax ID number (sole proprietors can use a Social Security number), register for state and local taxes, and obtain necessary licenses and permits, you’ll need a few other basic elements:

INFOGRAPHIC: HOW TO START A BUSINESS

“I’m not a businessman — I’m a business, man.” – Jay-Z

“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard.” – Caterina Fake, Co-founder, Flickr

A SOLID BUSINESS PLAN

“There’s lots of reasons to start a company. But there’s only one good, legitimate reason, and I think you know what it is: it’s to change the world.” ~ Phil Libin, Evernote CEO

Those who write and stick to a business plan are twice as likely to succeed in getting funding or growing their business. [source: http://smallbiztrends.com/2010/06/business-plan-success-twice-as-likely.html]

About half of all new establishments survive at least five years and about one-third survive at least ten years. The more time a business stays open, the more likely its prospects for longevity. https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf

FINANCING

“Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.” - Tim O’Reilly, O’Reilly Media founder and CEO

One-third of new businesses with no employees and 12 percent with employees use no startup capital at all. [source: https://www.sba.gov/sites/default/files/2014_Finance_FAQ.pdf] A December 2014 study of small businesses owners reported 52 percent didn’t want a loan and 32 percent reported all credit needs were met. Only 4 percent, a historic low, did not have their credit needs met. [source: http://www.nfib.com/surveys/small-business-economic-trends/]

LOCATION

You may be easy to find on a map, but do customers know how to find you on Yelp? 93 percent of people who research businesses on review sites typically make purchases at those businesses. Small businesses with Yelp accounts saw an $8,000 average increase in business, and when they paid to advertise that jumped to $23,000. [source: http://mashable.com/2013/09/02/yelp-reviews-infographic/]

HIRE YOUR FIRST EMPLOYEES

“To handle yourself, use your head; to handle others, use your heart.” - Eleanor Roosevelt

Small businesses that hired their first employee were more likely to do so in the first three years after startup: 38.1 percent hired their first employee by one year after startup and 54 percent by three years after startup. https://www.sba.gov/content/crossing-employer-threshold-determinants-firms-hiring-their-first-employee In 2012, 37 percent of hiring managers use social networking sites to research job applicants, and more than 65 percent of that group used Facebook as their primary resource. [source: http://www.huffingtonpost.com/2012/04/20/employers-use-facebook-to-pre-screen-applicants_n_1441289.html]

MARKETING AND PROMOTION

“It’s not the customer’s job to know what they want.” - Steve Jobs

53 percent of people on Twitter tweet about products they recommend, 90 percent of people trust recommendations they read online by people they know, and just 14 percent trust regular TV ads [source: http://dianehughes.info/2013/06/26/social-media-a-great-video-with-some-surprising-stats/] Facebook engagement rates on Thursday and Friday are 18 percent higher Question posts get 100 percent more comments (“should” and “would” questions do better than “why” and “how”), but fewer likes and shares [source: https://blog.bufferapp.com/7-facebook-stats-you-should-know-for-a-more-engaging-page]

Vanessa McGrady

About the Author

@VanessaMcGrady

Vanessa McGrady is an award-winning communications expert skilled in creating content for national publications, Fortune 200 corporations and small businesses.

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