Thinking of starting a business this year? You’re in good company. In fact, 2 out of every 5 Americans plan to launch their own business in 2023. Of those, 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 put you off.
We’ve got the tips you need to start the year (and your new business) off right.
Find Funding Right Away
One of your biggest questions before you begin is likely, “How am I going to pay for this?” Depending on your personal finances, you may be able to self-fund part of your business’s startup costs, but you’ll probably need some (or a lot of) support along the way. Wondering how to secure funding? Let’s dive in.
Everyone wants free money, but be warned: The competition for business grants is fierce. Grants don’t have to be repaid, but the application process can be tough. However, it’s always smart to look for grants for which your business might qualify. Check with the U.S. Small Business Administration and your local Chamber of Commerce and other nonprofit organizations that support small businesses.
Bank loans are a straightforward way to secure funding for your new business. However, you still have 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 helps to have registered your business as a legal entity (more on that in a bit), to have a dedicated business checking account, and to have evidence of clearly separated business and personal finances.
Small Business Credit
Similar to a credit card, a small business line of credit allows you to borrow a certain amount and repay it over time. Like a loan, you’ll have to go through a similar approval process, but be aware that interest rates aren’t always as favorable, so you may end up paying much more.
If you need a lot of funding you don’t want to pay back and are willing to share profits or give up an ownership stake in your business, you could look for an angel investor or venture capital fund. There’s a lot of competition out there, so you might benefit from looking into platforms that pair startups with investors, such as FundersClub and Wefunder.
Crowdfunding takes your great business idea directly to the people. You can start by simply asking friends and family for support or using a crowdfunding platform like Indiegogo, Patreon, or SeedInvest.
Protect Your New Business With a Legal Entity
Once you’ve made a plan to fund your business, it’s time to take one of the most critical steps in making your business legitimate: filing for a legal business entity. While it isn’t 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. Why? Because registering your business comes with many benefits, including:
- Liability protection that keeps your personal assets safe
- Ease of securing funding, business bank accounts, credit cards, and more
- Protection of your privacy and personal information
- Legitimacy that makes your business more trustworthy and appealing
While you can choose the business entity that best suits your needs, the most common is an LLC. It’s valued for its flexibility, cost-effectiveness, and low compliance requirements. There were 5.4 million business formations registered in 2021, the most recent year on record — more than any other time in history.
Start Building Your Brand and Online Presence
Your next step to get 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 that is to create an online presence.
First, you’ll want to learn as much as you can about what you’re getting yourself into. For most businesses, that means digging into the research on three key areas:
- Your customers
- Your market
- Your competitors
The best way to start your research is online. Search for trends in your industry, follow the competition on social, and pay special attention to what customers are saying about these rival brands.
Protect Your Brand
You’ve already made a huge step in reducing risk by filing as a legal business entity, but there are other ways to keep your brand from being poached by competing businesses. Look into registering a trademark for your name, logo, or even slogan. A trademark is the only surefire way to keep other businesses from using your intellectual property.
Build Your Website
Recent data shows that 71% of small businesses have a website. It doesn’t matter if you’re planning on an ecommerce business or not — to really thrive, you need a website. Websites help your business get found, build your reputation, and help your business succeed. You don’t need to hire an expensive developer, though — you can typically DIY 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 with them.
Stay Up on the Latest Swings in the Economy
To ensure your business’s success, you need to stay ahead of the forecasts for the economy in 2023. Nothing says you shouldn’t start a business in the year ahead, but it pays to be prepared. For 2023, the Harvard Business Review is predicting a bumpy ride, thanks to inflation, high interest rates, and overall uncertainty.
While growth is forecast to be sluggish, markets are still up, and actions taken by the federal government could work to reduce inflation and retain jobs, putting the U.S. on a trend toward economic recovery and growth.
There are plenty of uncertainties that come with starting a business, but there are countless benefits as well. With the right planning and preparation, you can make 2023 the year you achieve your entrepreneurial dreams.