In 2021, we saw the number of new small businesses hit a record high and that trend continued into 2022. According to SCORE, an organization that provides mentors to business owners, new small-business applications have steadily increased since 2016.
For example, in 2016 they had approximately 3 million applications and this grew to over 5 million in 2021. The growth in small businesses is most likely due to the pandemic and individuals wanting to make their own living. However, it takes more than just a brilliant idea and product to open and maintain a successful business.
It is important to remember that there are many hoops business owners need to jump through in order to get started. There are local regulations, business registrations, taxes, and major time commitments that individuals need to be mindful of if they want to start a new venture. Unfortunately, many people are unaware of the process it takes to open a business which is why it is important to become educated in this area so that you are set up for success.
One of the biggest misconception is that you will be immediately profitable when starting a company. Some believe that they can continue working the same number of hours and make as much money as their previous boss who owned a company.
In reality, running a business takes extra hours, especially when getting started. When jumping into a small business, individuals quickly realize that their once 40-hour work week often is a thing of the past as they may work 60 or 70 hours each week. This is specifically true during the first year of business.
If you are interested in starting a new business, it is essential that you understand the amount of time and effort that is needed to run it successfully. It is important to focus on time management, getting organized, good recordkeeping, as well as adopting consistent bookkeeping processes.
It’s also important to understand that the tax landscape can be rough on small businesses, so seek a professional for assistance. If you are prepared for the potential of working longer hours for less money initially, you may find your efforts pay off in a big way!
