If you are planning to start a business, it is very important that you do some research first. What exactly is the market into these days? Is there enough demand for you to thrive? What product/service should you sell? What is your ultimate goal in business? Are you determined to stick it out? Just how much resources, both time and asset-wise, are you willing to invest in? There are many more questions that you need to answer first.
Here we will list down some of the most important statistics on business startups and some tips on how to survive the dreaded first year.
69 Percent of American entrepreneurs start their businesses in the comforts of their own home. This is a generally good idea as you do not have to spend on rent and furniture just yet.
35 percent of small businesses are LLCs or Limited Liability Companies. LLC allows business owners to go on with their business operations without much fuss on their personal assets.
33 percent are S-corporations. S-corporations is well-known for protecting the assets of the business owner
19 percent are corporations, 12 percent are sole proprietorships, and the remaining 2 percent are partnerships.
The age of startup business owners are as follows:
18-29 years old 4 percent
30-39 years old 14 percent
40-49 years old 25 percent
50-59 years old 35 percent
60-69 years old 18 percent
70+ years old 4 percent
When you start a business, it is important that you know the reason for it. The bigger your passion to start a business, the stronger your will becomes. When problems arise, it is best to know why you started a business in the first place. Here are the most common reasons as to why many started their own business.
26 percent were just itching to be their own boss. Being an employee can understandably be stifling especially when you feel that you are not being listened to.
23 percent wanted to follow their passion project. A startup business allows its owners to freely pursue their creative side.
19 percent stated that the opportunity just presented itself. Usually, this meant that they found a void in the market that has high demand.
12 percent felt that they could do better than the existing corporate companies and so pushed themselves to start their own.
6 percent were laid off and thus had to find a new source of income.
The remaining 14 percent pointed out various reasons such as divorce, not ready to retire, etc.
There is a saying that a startup business is like a ticking bomb. Unless you hit the gold mine, your startup business will usually have a limited lifespan. In fact, studies have found that only 56 percent survive and make it to their fifth year in business. It would be wise to know why these businesses failed so you do not follow their footsteps.
42 percent found that there was no place for them in the market. Their product/service did not have enough demand for them to continue being in business.
29 percent filed for bankruptcy. Asset management and Contract management are challenging tasks that could prove to be difficult especially for those without experience. This is why it is recommended that new business owners use software and hire professional services so as to ensure little to no error.
23 percent sank because they did not have the right team on board to help them navigate through their journey to success.
19 percent lost to their competitors. When you start a business, you should expect that there will always be competitors present. However, many are still shocked at just how vicious the competition can be. Up to half of the disposable income of a company is usually spent on marketing efforts just to establish the hold of a company on the industry thereby eliminating any strong competitor.
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