Nothing beats the freedom of being the boss. With freedom comes the flexibility to make your own schedule and not have to answer to anyone. You’ll also have the satisfaction of making your own decisions. Starting your own business can be risky, but with that risk comes a reward. New entrepreneurs are attracted to the idea that they can build something big from scratch, at least something bigger than what they could as salaried employees.
Some entrepreneurs develop their reason for starting a business early, while some endure years of salaried corporate life before moving on to entrepreneurship. In any case, the No. 1 reason they want to start their own business is to become their own boss.
To understand why entrepreneurs take the risk of starting their own businesses, go directly to the source. Many surveys and researchers have asked small business owners what appealed to them about launching their own venture. The following research from Cox Business is a good example.
Cox Business found that more than half of small business owners start their own businesses to be their own boss. They were also motivated by the idea of creating something from the ground up. Nearly two-thirds of respondents said they had started their own business for one of those two reasons.
On the other hand, money is not as much of a factor for many small business owners: Just 8% of respondents said that was their main motivation.
Small business owners are also dedicated to building those businesses. The research revealed that 43% of business owners said they have never considered closing their business.
As technology advances, products and companies will arise that challenge existing companies. Despite those challenges, small business owners look at the rise of new technologies as more of an opportunity than a detriment for their businesses. Unless entrepreneurs embrace new technology, they will not be able to keep up with competitors.
Rather than viewing the technology as a challenge, entrepreneurs should look for a way it could further their businesses and personal outcomes.
Even though technology was not a high priority for many of the small business owners surveyed, they rated a tech superstar as their entrepreneurial idol: 21% of business owners said Steve Jobs was the entrepreneur they most wanted to emulate, followed by Ben Franklin and Walt Disney. The research was based on 605 responses from small business owners and managers at Cox Business.
You can do other things to motivate yourself to start a business. For example, find a role model or mentor. Let their struggles and successes inspire you. Similarly, reading books or case studies that apply to your goals can give you ideas for achieving what you want. Support from friends and family can also keep you on the right track. Communicate with them about what you desire, your challenges, and your plan to combat those challenges.
Preparing for entrepreneurship can be a big challenge. Take these steps to face your obstacles head-on.
A business plan clearly defines your business’s efforts and focus. It serves as a road map and a contingency plan for navigating potential problems.
Writing a business plan can help you determine and narrow your business goals. It’s also essential for funding. Lenders want to see that you’ve thoroughly considered your ideas and how they’ll generate a profit.
Whether you work at home or in an office, your business needs a formal legal structure. A small home business can become a sole proprietorship in a few simple steps with little paperwork. Be aware that this structure intertwines your personal and business finances, meaning issues on one side could affect the other.
Another option is to incorporate as an entirely separate business entity. This way, you can file taxes, own property and handle lawsuits without affecting your finances. To incorporate your business, you’ll file articles of incorporation that establish your business’s legal status.
For your business to be successful, people need to know it exists. A marketing strategy can help you identify potential customers, connect with them, and turn them into returning customers. Outreach campaigns, product promotion and customer engagement are all key components of marketing.
To create an effective marketing plan, know your brand and the audience you want to reach. From there, identify the core problems your business solves and market your company as the solution.
Forms, deadlines, records – they all make filing small business taxes a hassle. But if you properly handle your business’s documents and payments throughout the year, you can avoid a lot of frustration come April.
You’ll need to track your business’s expenses, store receipts, and create income reports. This information is key to properly filing your taxes and claiming deductions that lessen your tax obligation. You can file your taxes online yourself with software like TurboTax, a popular tool for small business owners. Read our review of TurboTax and other options to find the right software for you.
You might be great at managing your business’s operations, but there are plenty of areas in which you’ll need expert help. That’s why many entrepreneurs hire business professionals to oversee or handle certain aspects of their startups.
If your expense report or list of write-offs is getting lengthy, consider hiring a CPA to handle your taxes. This way, you can have peace of mind during tax season.
Another important professional to hire is a lawyer. A study from the U.S. Chamber Institute for Legal Reform found that small businesses faced tort costs of $182 billion in 2018. If your business is sued or needs to file a lawsuit, an attorney can review the case and help you navigate the legal process.
As your business grows, you might realize you can’t handle all its operations alone. Hiring employees can streamline your operations so your business can grow and function effectively.
Whether you’re bringing on one member or recruiting a few hundred, create a hiring plan to facilitate a smooth onboarding process. First, identify exactly which positions you need to fill. Then, decide whether you want to use a recruiting agency or simply post a job ad to connect with potential employees.
Although a new entrepreneur wants to be their own boss, usually their startup does need to hire new employees to perform various tasks. One of the challenges for a startup is attracting new employees, as some view joining a startup as risky for their careers. Keep in mind that most startups don’t end up being successful.
The pressure of funds, which can be limited for a startup, are also a challenge. Therefore, it’s not easy for any new business to hire the right people. To combat these challenges, a startup should have a plan for how to onboard new employees effectively and efficiently.
David Mielach contributed to the writing and reporting in this article.