4 Key Tips for Starting a New Business to Celebrate World Entrepreneurs Day
The trends, insights, and solutions you need to grow your business.
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More than 5 million new businesses were created last year in the U.S., the Census Bureau says, and of those, one-third were launched by first-time entrepreneurs.
Based on statistics from the Census Bureau, which tracks new business applications, that means, on average, almost 14,000 businesses were started each day in 2022, according to a story posted by Bloomberg.
New businesses and entrepreneurs are often lauded for their accomplishments, deservingly for their determination, innovation, and the jobs they create.
Further, a Kauffman Foundation report says the new jobs created by entrepreneurship are an “indicator of entrepreneurship's potential to provide opportunities for economic stability, mobility, and prosperity for entrepreneurs, the people they employ, and the communities in which they live and work.”
Let World Entrepreneurs Day on August 21 be a reminder to celebrate entrepreneurs everywhere.
Are you an aspiring entrepreneur? Look at these four key tips as you prepare to become a new business owner.
Assess Startup Costs
You must understand your expenses before starting your business -- doing so will help you launch successfully, notes the U.S. Small Business Administration. “Before your business opens its doors, you'll have bills to pay.”
The SBA says that calculating your startup costs will help you estimate profits, conduct a break-even analysis, secure loans, attract investors, and save money on tax deductions.
While your costs in part will depend on the type of business you’re starting, i.e., brick-and-mortar business, online business, hybrid or service provider, there are a few startup expenses that are commonly incurred, such as equipment and supplies, licenses and permits, office space and utilities, website creation, insurance, and legal and accountant fees.
Some expenses will have well-defined and publicly available costs, such as permits and licenses. For other expenses, you’ll need to research costs — the SBA suggests talking directly to vendors, mentors, and service providers to come up with estimates on those expenses, the agency advises.
To calculate your startup costs, pull out and calculate the “one-time expenses” on your list -- these are the initial costs you’ll need to get set up, such as buying major equipment, hiring a logo designer, and paying for permits, licenses, and fees.
Get a Business Bank Account
You’ll want to keep your personal and business finances separate, so open a business bank account.
“The best time to open a business bank account is before you accept the first payment for your company's goods or services,” advises a post by Business News Daily.
A business account adds professionalism to your new business, allowing customers to pay you with debit and credit cards, plus other perks that most personal accounts don’t, such as purchase and
personal data protection for your customers.
To open a business banking account, you’ll likely need to present your license to operate and a federal tax identification number -- either an employer identification number (EIN) or a Social Security number if you’re a sole proprietor, plus any personal identification documents.
Get Reliable Business Internet
Having a strong online presence is crucial to every new business — reliable, fast internet paves the way to everything from increased marketing opportunities and productivity to successful sales and growth.
Get high-speed business internet service set up and running to help future-proof your operations. You’ll want a reliable provider that matches your business's startup and future needs — you and your employees can work on multiple devices without lag, and customers get uninterrupted access.
Establish Business Credit
Establishing business credit from the get-go is a good idea, even if you don’t need financing right now.
Poor credit history can impact a business loan application in the future, as well as your insurance rates and the attractiveness of your business to potential partners, suppliers, and vendors.
“Establishing and managing business credit can help your company secure financing when you need it and with better terms,” the SBA says. “It can also help you negotiate supply agreements and protect against business identity theft.”
Consider getting a line of credit through your business banking account in case of emergencies or to finance an equipment purchase. A business credit card account is another way to help your business establish credit history.
Also, you might want to register for a Dun & Bradstreet number or DUNS number, which is free. It’s a unique identifier that some lenders and potential business partners use to check your business’s credit profile.