Now might be a really good time to be an entrepreneur, with increased access to quality commercial loans, improved economic conditions and a favorable environment to start a business.
A recent survey conducted by the Kauffman Foundation and LegalZoom polled a number of entrepreneurs and business leaders across the country, and the overall sentiment was positive. Most people noted that problems were few and far between, but even so, those interested in forming their own company could still encounter challenges and difficulties.
With that in mind, it may be beneficial to learn from entrepreneurs who have recently done it, and pay attention to a few key business and financial tips that can start a fledgling venture off on the right foot.
Entrepreneurs report an easier time
One of the key takeaways from the Kauffman Foundation and LegalZoom survey was the small amount of people who noted few difficulties with their new businesses. In addition, there also appears to be a good lending climate at the moment, with professionals having an easier time acquiring commercial loans and other forms of financing.
Out of the entire survey group, 37 percent of new business owners had a smooth and easy time establishing their organization. Among those who did find problems, the biggest issue was reported to be unpredictability, at 36 percent, followed by limited access to credit at 28 percent. Both of those figures decreased significantly from the previous survey in 2012. Moreover, many entrepreneurs stated that they used personal savings to help jumpstart their ventures. That number increased from 66 percent in 2012 to 86 percent recently. Business owners also used credit cards, retirement savings and loans to further fund their operations.
"In previous reports benchmarking entrepreneurial confidence, various elements indicated business owners' often optimistic outlook on the economy," said John Suh, CEO of LegalZoom. "But few actions correlate more directly with economic confidence than personal investment. Investing personal savings to start a business when credit is readily available signals high conviction in the future."
Overall, the survey indicated a greater confidence in the U.S. economy and the business sector, at least among entrepreneurs. This could mean there are plenty of opportunities out there for those who are interested.
Don't get hung up on the little things
When it comes time to start a new business, many people assume there are a number of complicated steps and processes along the way, from legal hang-ups to tricky administrative tasks. However, these steps are easier than they may seem, and a lack of confidence shouldn't be the end of a good idea.
According to Jeff Haden, a contributor to Inc. magazine, nearly all of these startup tasks can be completed in only a few hours, which means they shouldn't be the reason why a venture crashes and burns before it ever gets off the ground. For starters, entrepreneurs should forget about branding and the company name, and instead get the other behind-the-scenes processes going. These elements can come later, and there is no reason why a website URL has to be the first thing developed at a company.
Next, the most important step is to get an Employer Identification number, or EIN, Haden explained. This is needed if the business will eventually have employees or become an LLC or corporation, but it is a good idea even if those steps aren't in the near future. It is free to acquire, and it is useful on all related tax documents from here on out. Without it, entrepreneurs will have to use their own social security numbers to file, which can increase risk. With these initial steps completed, the rest of the process will come easily.