Starting a business in 2023? Here’s what you need to know

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Thinking of starting a business this year? You are in good company. In fact, 2 out of every 5 Americans plan to start their own business in 2023. Of that, 32% will live out 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 deter you.

We’ve got the tips you need to start the year (and your new business) off right.

Business funding
photo credit: Karolina Grabowska / Pexels

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One of your biggest questions before you start is probably, “How am I going to pay for this?” Depending on your personal finances, you may be able to fund some of your business’ start-up costs yourself, but you’ll likely need some (or a lot) of support along the way. Wondering how to secure financing? Let’s dive in.

awards

Everyone wants free money, but be warned: The competition for business grants is fierce. Grants do not have to be repaid, but the application process can be difficult. However, it is always smart to look for grants that your business may qualify for. Check with the US Small Business Administration and your local Chamber of Commerce and other nonprofit organizations that support small businesses.

Traditional Loans

Bank loans are a simple way to secure financing for your new business. However, you still need to go through the approval process and find a repayment plan that works with your current finances. To get the best rates and secure approval, it helps to register your business as a legal entity (more on this in a bit), have a dedicated business checking account, and have evidence of clearly separated business and personal finance.

Small business credit

Similar to a credit card, a small business line of credit allows you to borrow a certain amount and pay it back 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 could end up paying a lot more.

Investors

If you need a lot of funding that you don’t want to pay back and are willing to share profits or give up an ownership interest in your business, you can look for an angel investor or venture capital fund. There’s a lot of competition out there, so you can benefit from looking at platforms that connect startups with investors, like FundersClub and Wefunder.

Crowdfunding

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 finance your business, it’s time to take one of the most critical steps in making your business legal: filing for a legal business entity. While this isn’t technically a requirement—and you can run your business as a sole proprietor without a legal structure—it’s always the recommendation for new business owners. Why? Because registering your business has 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 attractive

Although you can choose the business entity that best suits your needs, the most common is an LLC. It is 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 at any other time in history.

Business branding

Start building your brand and online presence

Your next step in getting 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 this is to create an online presence.

Do research

First, you’ll want to learn as much as you can about what you’re getting into. For most businesses, this means delving into research into three key areas:

  • Your customers
  • Your market
  • Your competitors

The best way to start your research is online. Look for trends in your industry, follow the competition on social media, and especially pay attention to what customers are saying about these competing brands.

Protect your brand

You’ve already taken a big step in reducing risk by filing as a legitimate business entity, but there are other ways to prevent 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 safe way to stop 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 are planning an e-commerce business or not – to really thrive, you need a website. Websites help get your business found, build your reputation and help your business succeed. However, you don’t need to hire an expensive developer – you can usually make your website yourself using a platform like Wix or Squarespace.

Get Social

Just like having a website, being on social media is a must. One of the most important ways to get new customers is to visit wherever they are. And in this digital age, it’s on social media. Choose the platforms where you’re most likely to find your ideal customers, and then see how your competition engages with them.

Entrepreneur learns growth strategy

Keep abreast of the latest swings in the economy

To ensure your business’s success, you need to stay ahead of the predictions 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 predicts a bumpy ride, thanks to inflation, high interest rates and overall uncertainty.

Although growth is expected to be sluggish, markets are still bullish, and actions taken by the federal government could work to reduce inflation and preserve jobs, putting the US on a trend toward economic recovery and growth.

There are many uncertainties that come with starting a business, but there are also numerous benefits. With the right planning and preparation, you can make 2023 the year you realize your entrepreneurial dreams.



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