Forbes | Every year over 400,000 small businesses are launched in the United States, many driven by the desire for ownership and independence.
It’s scary and needs a lot of hard work because according to the Small Business Association, over 20% of new small businesses fail during the first year of operation.
A recent survey, conducted by a lending company in partnership with Guidant Financial, examined the biggest challenges entrepreneurs face whether they are baby boomers, Gen Xers and millennials. The study found that the largest barrier that entrepreneurs face is finding funding. Another common obstacle is the lack of knowledge about where to start.
Start with business research
Start by looking at the market landscape, the main competitors, the credit score and potential upstart costs. Then begin to build a clear business plan and budget, and set the financial goals, including revenue, cash flow and growth.
Seek legal counsel
Taking the proper legal precautions early on can save a new business owner from financial and legal pains later down the line. Try to seek legal counsel for various aspects of the business. The U.S. Small Business Administration provides a starter guide on state filing requirements, federal filing requirements, maintaining licenses and permits, and matching with free business counseling online or at a nearby location.
Learn how to get financial help
The most popular financing sources to get businesses up and running include friends, family, home equity, crowdsourcing and credit cards. Many small business owners also look to bank loans to get capital — in fact, small business bank loans reached almost $600 billion in 2015.
Choosing the way to finance a small business depends on its specific needs and stage. Another option to consider is taking out a loan through an online lender or credit union that offers financing and looks at a wider range of factors — like credit score and income — to underwrite loans.
Research before investing in marketing
When developing an initial marketing plan, start with small goals and measurable targets. Research who the customers are, how to reach them, and how the competitors are engaging with them.
Yes, starting a business can be the culmination of an entrepreneur’s ideas, passions and planning. There is much potential for growth but they should ensure to set up for long-term success. They should take full advantage of the existing resources, study the competitors and industry landscape, and understand the available capital or investment opportunities. Getting started early with good planning is the best way to ensure success in the future.