When considering becoming an entrepreneur, many people may imagine someone with years of business experience, business-sharp acumen, and an impressive resume that demonstrates a long career of varying positions. However, that idea is long outdated, especially as becoming an entrepreneur and starting a business has become more accessible than ever for anyone with a good idea and the drive to learn.
This is especially true with younger generations. In 2021, approximately 5.9 million entrepreneurs were under 35. More than ever, up-and-coming generations want to pave their way in business, likely molded by the changing workplace landscape, the lingering effects of the pandemic on career considerations, as well as an overwhelming desire to make their own rules while reaping the benefits.
Additional benefits like better anticipating one’s income, working remotely and with flexibility, and building a brand on an ethical foundation are especially important to millennial and Gen X entrepreneurs, ultimately changing the landscape of small businesses and beyond.
For those who wish to join this growing group of entrepreneurs, the good news is there are a myriad of resources to get you started. The bad news: you still have to be willing to put in the work to find success. While there is a swathe of resources—whether informational, financial, or educational—the fact remains that successful entrepreneurs have to put in the work to make it happen.
With that said, the amount of information at one’s disposal is proof of why so many people under 35 are thriving—with more entrepreneurs hitting the ground running every day.
This is especially true with younger generations. In 2021, approximately 5.9 million entrepreneurs were under 35. More than ever, up-and-coming generations want to pave their way in business, likely molded by the changing workplace landscape, the lingering effects of the pandemic on career considerations, as well as an overwhelming desire to make their own rules while reaping the benefits.
Additional benefits like better anticipating one’s income, working remotely and with flexibility, and building a brand on an ethical foundation are especially important to millennial and Gen X entrepreneurs, ultimately changing the landscape of small businesses and beyond.
For those who wish to join this growing group of entrepreneurs, the good news is there are a myriad of resources to get you started. The bad news: you still have to be willing to put in the work to find success. While there is a swathe of resources—whether informational, financial, or educational—the fact remains that successful entrepreneurs have to put in the work to make it happen.
With that said, the amount of information at one’s disposal is proof of why so many people under 35 are thriving—with more entrepreneurs hitting the ground running every day.
Before Starting Your Home Business
Deciding on a Location
Depending on the product being sold and the business structure you work with, the physical location of your business may vary greatly.For example, some young entrepreneurs with limited budgets may find the most success in working from home; others may prefer to rent an office space to maintain a separation between work and home life. There are also those who enjoy the energy of coffee shops or co-working spaces.
Another consideration might be if your startup will begin with employees on the roster, or you intend to include more employees down the road. The location of the business should be taken into account when you consider whether your employees will be working in-office, remotely, or via a hybrid model.
All formats have unique benefits and potential downsides, so it’s important to have an idea in mind for your location early on.
Further, determine early on whether or not your business will provide tech appliances to ensure all employees are working with the same tools. An in-office setup will naturally differ from a remote setup, but considerations should be made regarding consistency with monitors, laptops and accessories, and printers, depending on your working format.
Marketing and Selling
Before any production begins, the first step is to perform proper and thorough market research to determine whether or not the product idea will be successful as-is. Market research is a detailed process, including the following considerations:- Ideal consumer audience and where to find them
- Current industry trends in manufacturing and marketing
- Industry competitors, including what they’re doing and why they’re successful
- Whether consumers are more likely to frequent a brick-and-mortar location or an online store
- How to best price a product or service to make a profit without pricing yourself out of the market
- Wholesale allows for more personalization and quality checks with every order. It may also allow for easier customer service, especially in cases of tracking lost shipments or processing refunds and exchanges. However, it also means you will have to keep stock on hand at all times—whether in your home or in a nearby location—which will accrue an additional cost.
- Dropshipping means the product is produced and shipped from a third-party manufacturer at another location. This could save on storage costs, improve overall productivity and efficiency in fulfilling orders, and remove the extra burden of hiring and management from you, as the business owner. However, dropshipping also means you’re not there to address production issues early on, and there is a smaller profit margin. Further, there’s an additional third party between you and the customer that could hinder things like correcting errors, and processing returns and exchanges.
Legal Concerns and Considerations
Choosing a Business Structure
There are many ways to structure a business, and most depend on the type of business, the product being sold, and the size or number of employees. Business structure also determines tax filing status, and could change what loans and grants you may qualify for both as a startup and later on down the line.Some business structure types include:
- Sole Proprietorship—Run and managed by a single individual
- Partnerships—Owned by two or more people, and can be categorized as either General or Limited
- Corporation (C Corp)—Separates the individual from the company, mainly for legal and security of personal assets
- S Corporation (“S Corp”)—Corporate financials pay an individual’s income directly to avoid some corporate-specific tax rates
- Limited Liability (LLC)—Offers the legal protections of corporations and the flexibility of sole proprietorships and partnerships
From there, ensure you’re registered for the correct tax filing requirements of your chosen business structure, as well as all of the proper registration, licenses, and permits required to sell your product or service—both in your state and according to federal laws.
Choosing a Business Name
Not only should your business name be memorable, applicable to your industry, and ideally easy to spell, other considerations include:- Considerations around pre-existing businesses with the same or a similar name
- Filing for an official trademark, including logos and other branding
- Ensuring the business name best represents your business and products/services being sold
- Choosing something that isn’t likely to change as the business grows
In the end, thorough market research will help when making these decisions.
Filing For an EIN
Unless you are a sole proprietor, where you can generally use your SSN in tax filings, you need to prioritize registering your business for an Employment Identification Number (EIN). An EIN ensures you’re not only protected legally, but that you’re paying the right amount of tax and filing the proper documentation to avoid possible fines or owing more money throughout the year.There is no revenue or structure required for an EIN. Even sole proprietors can file for an EIN if they wish.
Insurance Needs
Business insurance applies to more than just physical damage—some aspects of reputation management, data security, theft, and larger disasters also exist under the umbrella of coverage that should be considered no matter the type or size of the business. Particularly in regard to building a business resiliency plan in the event of an accident or disaster, various types of small business insurance should be considered.Some types of small business insurance include:
- Liability Insurance: Use in the event of a product-related accident or other physical accident on the property of your business.
- Commercial Property Insurance: Protects the physical location of the business in the event of vandalism, theft, accidental damage, or cases of severe weather and other natural disasters.
- Interruption Insurance: Commonly considered within business continuity plans, covers financial loss in the event of an accident, disaster, theft, or another security threat that results in downtime and interrupted revenue streams. This type of insurance might be more or less valuable depending on your overall usage of tools like the cloud and other industry tech, but is still an important consideration, nonetheless.
- Other Insurances: Depending on the industry and size of your business, other considerations include, but are not limited to, company auto insurance, cybersecurity insurance, workers’ compensation insurance, mistake and error insurance in the event of accidental data deletion, and so on.
If you are an entrepreneur working from home, you may also need to research whether or not you can insure your home, or parts of your home, in correlation with your business. Depending on where you live, you may be better off renting a secondary office space or investing in a co-working membership.
Establishing Brand Awareness
Building a Brand
When it comes to a brand and building one that is memorable and effective, many beginning entrepreneurs may consider a name and a graphic logo to be enough. However, professional and small business branding goes much further than simply the visuals.
A small business’ branding includes product type and quality, customer service, engagement with an audience, community enrichment, employee happiness, and so much more. Developing a brand that is not only memorable, but carries a positive connotation amongst an audience is going to be one of the best ways to bring new interest to your products and services.
A small business’ branding includes product type and quality, customer service, engagement with an audience, community enrichment, employee happiness, and so much more. Developing a brand that is not only memorable, but carries a positive connotation amongst an audience is going to be one of the best ways to bring new interest to your products and services.
Social Media
Especially in the current tech and consumer climate, a non-negotiable part of branding involves social media and how the business is portrayed there. A social media strategy, specifically, will help to determine whether or not your business’ branding and overall engagement is successful or simply an inefficient use of funds.
Some basic social media strategies include:
Some basic social media strategies include:
- Being active and available on the right platforms depending on your intended audience
- Engaging with comments and the community, especially when addressing negative feedback and reviews
- Portraying one’s business, products, customer service, and all-around appearance with positivity and constant improvement
Funding Resources for Entrepreneurs
While small business loans are a common and generally reliable way to fund a startup, there are several other options at your disposal. Some of those other options include, but are not limited to, the following:
Grants
Especially for entrepreneurs coming from traditionally underrepresented backgrounds, there are several small business grants available both from the US government as well as private entities.These grants exist mainly to promote entrepreneurship across the board, but there are others available in cases of natural disasters, poor economic climates, and other instances where entrepreneurs may face difficulties in starting their business or keeping it afloat.
Crowdfunding
While crowdfunding isn’t particularly new to the world at large, it’s not yet considered a traditional way of sourcing income for a new venture. Despite this, crowdfunding has become a popular means of raising startup capital for small businesses.Some crowdfunding platforms are better for business than others, for several reasons ranging from the industry niche to the overall success of projects. There are also a myriad of platforms to choose from, all ranging in their levels of success in meeting goals. Some of these platforms include:
- EquityNet
- Fundable
- MicroVentures
- SeedInvest
Competitions
Competitions could be a great way to not only gather startup funds but also raise awareness of the startup and earn accolades to present on a website or social media. There are several different competition types, including product presentations or pitch competitions. Some current pitch competitions include America’s Seed Fund, SXSW Pitch, and Cartier Women’s Initiative.Small Business Loans
Traditionally, many small businesses get their initial funds from small business loans. There are different types of loans to look into and apply for, ranging from industry, type of business, those meant for entrepreneurs of underrepresented backgrounds, and more. Some of these loans include:- SBA loans
- Lines of credit
- Personal loans
- Business credit cards
- Terms loans
Venture Capital
Venture capital is when a private individual or business person invests in a startup to fund costs, as well as potentially earn their money back (and more) as the small business grows. There are several ways to gather venture capital, from seeking out individuals interested in supporting small businesses to looking into larger venture capital groups that focus on investing in startup businesses.Many local universities and committees have venture capital groups you can pitch. You might also find these groups in social media platforms, such as LinkedIn.
Other Resources for First Time Entrepreneurs
It would be impossible to include every tip and trick for a successful startup in one place, and any good entrepreneur will emphasize the importance of widespread and diverse learning. While gathering resources and educating yourself, focus on where you’re getting your information, and where the best resources for your niche might come from. Some additional sources of information include, but are not limited to:- LinkedIn Groups can be particularly valuable in networking with other professionals in your intended industry. It’s also a natural place to build rapport and connections with other new business owners to build a strong community and open up opportunities for collaboration in the future.
- Alumni or Student Groups can introduce you to other future business owners who may have connections or other resources that are valuable to your venture.
- Accelerators, which are different from incubators, are groups that provide resources, training, insight, and specialized advice to up and coming businesses, not unlike a professional mentorship.
- Business Skills-building Courses are valuable for first-time entrepreneurs seeking niche information or resources depending on their intended industry, as well as those who did not pursue traditional school or business degrees. While traditional business degrees are, understandably, highly valuable in starting a business, it’s important to also consider other sources of skill building such as online courses or other local resources.
For more information about building your business, contact an Account Manager today!
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