While conducting business research for a client, I came across an interesting statistic that caught my attention. One of the most frequently searched inquiries regarding starting a business appears to be "who can assist me in launching a start up?” I find this a bit puzzling because there is a distinction between a startup and a small business. Although many tend to use the terms interchangeably, there are some subtle differences between the two that are worth noting.
This article delves into a valuable lesson I've gained from my own experiences, as well as the experiences of clients and family members who have embarked on entrepreneurial journeys, both large and small, over the past 15 years. It's crucial to understand that there isn't a one-size-fits-all approach when it comes to starting a business. The most important aspect of starting a business is something that only you can do, and the best part is it doesn't cost anything: taking the first step.
What is Considered a Startup?
A startup is a company in search of a scalable business model, designed for rapid growth with the goal of industry disruption. While startups are often associated with technology due to their potential for reaching a large user base quickly, they can encompass various industries.
In order to achieve growth, startups must develop a product or service that appeals to a wide audience. This typically involves investing capital upfront before generating profits.
Those interested in influencing an industry and achieving financial success, particularly in the tech sector, may consider venturing into the world of startups. However, it's important to acknowledge the inherent risks involved. Startup founders dedicate significant time and money to testing ideas that may or may not resonate with the market they are trying to disrupt.
Ultimately, the essence of a startup lies in introducing a game-changing product or service to the market. By conducting thorough research, securing funding, and testing their offerings, startups take a leap of faith in their ability to succeed and enact meaningful change.
What is Considered a Small Business?
The US Small Business Administration (SBA) defines a small business as a for-profit, independently owned and operated business that conducts their operations within a local or regional market.
To be classified as a small business, a company must meet certain size standards in terms of revenue and number of employees. These standards vary by industry, but 89% of small businesses in the US have fewer than 20 employees.
While there are risks associated with starting a small business, with 20% failing within the first year, small businesses benefit from entering an established market. This lowers the risks and makes them more manageable compared to startups.
You Have Decided to Open a Business, Now What?
I strongly advise anyone with even a slight interest in starting a business to focus on learning. The internet offers a wealth of information to guide you through the process of creating a business plan and launching your venture. However, the abundance of information, some of which may be conflicting, can be overwhelming.
Below is a list of 5 steps you can take to embark on your entrepreneurial journey once you have bravely made the decision to go for it!
1. Define your product or service – it is important to remember that this does not need to be the final business product or service. Many of us start with an idea that evolves, changes, and morphs into something different as we go through the process.
2. Conduct Market research: Market research will tell you if there’s an opportunity to turn your idea into a successful business. It’s a way to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business and to establish your business/brand identity and brand voice.
3. Choose a Business Structure: The legal structure you choose for your business will impact your business registration requirements, how much you pay in taxes, and your personal liability. This step is critical as you will need to determine the type of business you are opening to decide if you need an EIN, Fictitious Name Statement, and any other required documentation to register your business with the state.
4. Choose your business name: It can be challenging to select the perfect name. You’ll want one that reflects your brand and captures your spirit. You’ll also need to ensure that your business name is not already in use by someone else.
5. Register your business: Once you have chosen the perfect business name, confirmed its availability, and obtained your EIN (if applicable), it’s time to make your business legal and protect your brand.
Who can help me start a business?
I have also observed that another frequently asked question is "who can assist me in launching a business." Upon researching this question, I observed that the initial search results primarily featured advertisements for online businesses offering startup assistance for a fee of $25, as well as directories of lawyers and CPAs offering comprehensive paperwork services and state law compliance for a premium cost.
The abundance of options available can be overwhelming and lead to financial concerns. To address this, individuals may consider utilizing one or more of the ten business professional categories listed below:
Small Business Administration
Accountants/CPAs
Lawyers
Registered Agents
Business Coaches
Consultants
Accountability Partners
Brand and Marketing Managers
Human Resources Operations Support Professionals
Financial Advisors
The Importance of Consulting and Coaching in Business
Consulting can provide you the expertise necessary to navigate the complexities of a new venture when starting a business. Effective coaching can transform your vision into reality, guiding you through the challenges that come with a new business. Remember, strong leadership isn't just about managing a small business; it's about inspiring and innovating from Day One.
You do not need to involve a large number of individuals or invest a significant amount of money to initiate your business. We are not suggesting that it will be effortless, as there are numerous factors to understand and take into account as you commence the process. However, you do have the opportunity to pursue a strategic approach by carefully selecting when, who, and how you seek external assistance. It is essential to take calculated risks, be prepared to invest in yourself, and effectively manage your expenses in order to increase your chances of achieving success.
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