According to research by the Commerce Institute, around 4 million businesses are started in the United States annually. Additionally, small businesses are the largest employers in the country. But, on the flip side, 18.4% of small businesses close within the first month, and a staggering 49.7% in the first five years, as reported by the Lending Tree. Starting a business can be a rewarding experience, but it carries a significant amount of risk as well. In this article by the Crestone Business Group, we’ll explore some tried and tested strategies aspiring entrepreneurs can practice to familiarize themselves with a business owner’s lifestyle before committing to it full-time.
Find a Profitable Business Idea
A healthy bottom line will be the deciding factor for whether your business will thrive or go under. But, before you get into the nitty gritty of finances, dedicate time towards finding a profitable business idea, such as:
- Business Consulting: Individuals with extensive experience in management positions often opt to become business consultants. In comparison to being an employee, as a consultant, you can work for multiple clients, choose projects that fit your niche, and charge premium prices when working with large companies.
- Freelance Writing: The content creation market is booming since the start of the pandemic, owing to businesses adopting a digital-first approach. Blogs have become a cornerstone of a successful content strategy, and as a result, the demand for skilled writers is higher than ever before. As a freelance writer, you’ll be able to service clients across industries, have multiple product offerings and find steady work.
Test the Idea
Before you quit your job and choose to become a full-time entrepreneur, you’ll need to validate that the idea is as profitable as you think. This involves creating a website, starting client outreach, and selling your products. As a one-person business, it’s best to choose a niche audience and start with a handful of clients.
Ideally, you should experience growth on a month-on-month basis for at least the first six months. Additionally, the business should break even at a minimum (the goal will always be to earn a profit). Based on this performance, create financial forecasts for the next 12, 24, and 36 months, as it will provide a clear idea regarding how the business will perform long-term and the costs that you will incur.
Earn Professional Certifications
The secret to being a successful entrepreneur is to develop a growth mindset i.e. always be open to learning new skills and applying them to the business. For instance, managing a business in the tech space is tough, owing to the constant introduction of new technology and practices. Earning a CompTIA A+ certification is a great way to keep up with these changes. CompTIA is a reputed non-profit that provides a range of certification programs for professionals in the IT industry.
The skills and knowledge you’ll develop from these certifications will provide the confidence and expertise needed to become a better entrepreneur. Additionally, highlight these certifications on the website to build credibility among clients and develop a strong reputation.
Establish an LLC
By default, all new businesses are considered sole proprietorships. A major drawback of this business structure is no separation between the owner and the business. Hence, the owner (you), will be held personally liable for all business-related liabilities, and your assets (home, car, etc.) can be used by creditors to collect their debt.
In comparison, a Limited Liability Company (LLC) establishes the business as a separate legal entity. This protects your assets and personal finances from business-related debts. Additionally, with an LLC, you can claim business expenses as tax write-offs totaling hundreds if not thousands of dollars annually.
Starting a business always requires entrepreneurs to take a leap of faith. But choosing the right business idea, testing its profitability, and establishing an LLC before becoming a full-time entrepreneur will increase your chances of success and make entrepreneurship a successful endeavor.
The Crestone Business Group is a full service business brokerage firm. This Colorado premier business advisory has helped sell dozens of businesses over the past two decades for the highest price that the market would bring. Crestone Business Group is supported by the best brokers today. Call or text (719) 330-4715.
Credit for this Blog:
Corinne Hammond
Bebizminded.com
chammond@bebizminded.com
Photo Credit: Mart Production via Pexels
