Do you have an idea for a new business or have always thought about the idea of being your own boss and working for yourself? If so, you definitely aren’t alone.
The truth is, more people are taking the leap to start a business of their own, while also discovering it’s now easier and more cost effective than ever before to get started. At the same time, there are already more than a billion active websites on the internet today — many of which are discovering how to make money with their existing traffic and services, which leads to even more businesses going live daily.
In fact, Small Biz Trends has the following stats to offer in reference to new businesses started online and offline in the world today:
- 69 percent of U.S. entrepreneurs start their businesses at home.
- According to the National Association of Small Business’s 2017 Economic Report, the majority of small businesses surveyed are LLCs (35 percent) followed by S-corporations (33 percent), corporations (19 percent), sole proprietorships (12 percent), and partnerships (2 percent).
- 51 percent of people asked, “What’s the best way to learn more about entrepreneurship?” responded with “Start a company”.
If you already have a business of your own, you will likely remember asking these same questions and remembering what it was like to walk through the initial stages of starting your own business — even more so if it was 20+ years ago before the internet made everything so simple and fast.
From a motivation standpoint, more than 50% of people are ready to be their own boss or wanted to pursue having their own business. However, the top challenges for accomplishing this were offer due to a lack of capital, not having the necessary funds for marketing and advertising, or having little to no time to start such a venture. (source)
With all of this in mind, there are plenty of questions, concepts, and resources to consider when starting a business of your own. Many of which we will cover in more detail below.
Inc vs. LLC vs. Sole Proprietorship, Etc…
You’ve likely see a symbol or a few letters after many different business names in your lifetime. Unless you are already an entrepreneur or business owner, you probably have no idea what these are, why they are listed, and the difference between them.
The most common ones are LLC, Corp and INC. There are also different company types, such as S Corp and C Corp.
Instead of diving into a whole bunch of business and legal jargon, we will let the infographic below from MBO Partners speak for itself.
When starting a new business, you are going to have to pick one of these organization types when starting your business, so be sure to play around with the infographic chart above and see which would be best for your new business, project, team or organization.
Starting a New Business Outside of the United States
Ideally, it’s usually best to start a business in the country you live in. However, this can also vary depending on the funding on your company, your expected growth, and the regulations and complexities surrounding the actual process of launching a new business within your designated country.
According to USANews, Luxembourg, Switzerland and Panama are three of the most business friendly locations to start a new company in the world today. If you don’t live in any of these areas, don’t stress — business owners thrive throughout the world, no matter where their business might be registered.
Also, just like how there are different business names and identities to choose from, there are also many different ways to file and start a business with your local government as well.
There are plenty of resources for anyone in the United States to get started with the filing process, but that isn’t the case for everyone. For everyone else, we’ve listed some useful resources below for other popular and growing business countries like Singapore, Germany and Switzerland below.
- Starting a Company in Singapore – Singapore is one of the most popular countries in the world for new businesses and entrepreneurs. In order to register a new company, there must be at least one shareholder and a maximum of fifty shareholders within the company. One resident must also act at the manager of the company, and only individuals at the age of 18 or above are accepted as company directors or managers in Singapore.
- Forming a Company in Germany – While Germany is already a thriving country for business around the world, it’s also a hot spot for new entrepreneurs, tech businesses and startups as well. Being within the EU markets, it makes for a great infrastructure and provides highly qualifies workforces and employees from local markets and around the world. Berlin is one of the most popular and active cities within Germany for business growth as well. To get started with the registration process in Germany, one must first find a registering office, open a bank account and hire a local accountant for the company.
- Launching a Company in Switzerland – Of the many different locations and hot tech spots around the world, Switzerland is one you likely hear about, but haven’t actually pursued a heavy interest in. If this is the case, entrepreneurs and businesses must follow several steps in order to form a legitimate company within the country — which consists of drafting articles of association, completing the forms required by the company registration office, specimen signatures, passport copies and other relevant documents. After all of these actions have taken place, it’s then important to find a registration office, open a bank account, register for taxation purposes and hire a local accountant are also part of the company formation process in Switzerland.
No matter where you might be focusing your efforts on to register and start your business, it’s important to make sure you put in the time and effort early on to make sure it’s set up correctly from day one.
While it might be time consuming to go through the tedious amounts of text and requirements to start a new business, it will take even longer if you select the wrong business type or need to change something after the fact.
In all scenarios, if you are unsure about what entity, or in what location you should start a business, it’s recommended to seek legal counsel as many businesses and services are already set up to help walk users through this process on a daily basis.
How to Create a Successful and Profitable Business
In that same article referenced above from Small Biz Trends, they also highlighted the following stats on how many businesses are successful (or fail) during their first few years.
Of all small businesses started in 2014:
- 80 percent made it to the second year (2015);
- 70 percent made it to the third year (2016);
- 62 percent made it to the fourth year (2017);
- 56 percent made it to the fifth year (2018).
As scary as those numbers might be, this is why it’s important to make sure you have a solid business plan and marketing approach in place before going live with your company.
Small Biz Trends also listed the following stats in reference to the top causes for small business failure:
- No market need: 42 percent;
- Ran out of cash: 29 percent;
- Not the right team: 23 percent;
- Got outcompeted: 19 percent;
- Pricing / Cost issues: 18 percent;
- User un-friendly product: 17 percent;
- Product without a business model: 17 percent;
- Poor marketing: 14 percent;
- Ignore customers: 14 percent; and
- Product mistimed: 13 percent.
As you can see with many of the reasons here, if often came down to not putting in the necessary time, research and effort to not only have a successful business model and product, but also to understand and price their market and target audience of customers as well.
Take These Stats and Resources to Heart, and Start Your Company
The steps in which one must take to start a new company isn’t that horrific or costly, however, just because it’s easy to start a company it doesn’t mean it’s easy to create a successful company.
Be sure to seek legal guidance and business counseling whenever necessary, as this can save a lot of time, money and frustration when trying to launch or grow your business.
As mentioned at the beginning of the article, the internet is completely changing the way business is done in the world today. It’s important to take advantage of the many tools, resources, and stats at hand — and it’s never been a better time to start a new business, while also securing your financial future in the process.