New entrepreneurs face a challenging road to success as there are many moving parts to a business. Managing every aspect of a business is extremely important because they are all necessary for success. In addition to these pressures many new businesses are being started every month in the US. According to the US Census Bureau 423,153 new businesses were formed in April of 2022. The Midwest and the South saw increases in business formation across the board while the West and Northeast saw decreases in business formation.
With so many factors working against entrepreneurs they need to plan their business strategically. This article presents five factors that new entrepreneurs should consider when starting a business. Each of the factors are irrespective of industry and are important for a business to set themselves up to succeed.
1. Business Name
A business’s name is the most important part of the business and it is the cornerstone of the identity of the business. A good business name will concisely convey the nature of the business as well as the brand which the business represents. Shorter business names are preferable because they are easier to remember and market effectively. Longer names tend to obfuscate the purpose of a business. Entrepreneurs who are unsure of their business name should consider using TRUiC’s Business Name Generator to find a compelling name for their business.
2. Business Bank Account
A business bank account is an important factor of starting a new business because this creates a separation in finances between the owner and the business. This separation makes managing the money easier and it makes filing for taxes clearer. Additionally a business bank account is essential for developing a strong business credit score. A business credit score will determine how likely financial institutions will be to extend a loan or credit to the business. Before acquiring a business bank account a business may need an Employer Identification Number which functions as the social security number of the business.
Entrepreneurs always need to be prepared so that their business has the best chance of success. While unfortunate events can not always be predicted, they can be insured against. Insurance is one of the best ways for a business to achieve peace of mind and know that if disaster strikes the business will be covered. Some types of insurance are mandatory depending on the nature of the business. A business which employs workers will need workers compensation insurance and a business which owns vehicles will need a commercial auto insurance policy for every vehicle that it owns.
4. Establishing an Online Presence
An online presence is one of the key elements of success for a business in the modern business climate. Many consumers use online platforms to assess a business before purchasing their goods or services. The two most important things a business should have to develop an online presence is a website and a social media presence. Having a striking business website has been made easier than ever thanks to the prevalence of web building tools which are available for a small cost. A social media presence can be set up for free and is an easy way of marketing to a business’s target market.
5. Choosing The Best Business Entity
There are many different types of business entities available for entrepreneurs but the most common business entities are LLCs and C Corporations. An LLC or limited liability company is easier to establish and maintain than a corporation but a corporation does allow for easier transitions of ownership. This can be essential for entrepreneurs seeking to raise capital by selling equity. Both business entities provide limited liability asset protection to their owners which assists with risk mitigation. Limited liability asset protection insulates a business’s assets from the actions of the owner and it insulates an owner’s assets against the outcomes of the business.
New entrepreneurs will encounter many obstacles on their path to success. This article highlights the five most important factors which new entrepreneurs should keep in mind when they start their business. Every great business begins with a great business name. Business owners should then consider which business entity is best for their business. A business bank account and insurance should be next on the list. Finally, with the other administrative work out the way an entrepreneur should focus on establishing an online presence for their business.