The majority of people who plan to start a business within the next 12 months say the coronavirus influenced their decision. 28% said the pandemic accelerated their plans to start a business, according to a recent QuickBooks survey. 35% set out to start a new business for additional and much-needed income.
But starting a business doesn’t look the same as it once did. More new business owners (75%) plan on hiring remote workers this year. And nearly 9 in 10 plan to host their new business online. In fact, building a website is a top priority for 58% of new business owners, compared to only 33% of current business owners. New business owners are more focused on getting funding than their predecessors. And 76% say they have a contingency plan if things don’t work out.
New business owners plan to DIY
Then again, some things never change.
New business owners will still have to do things like register their businesses, pay taxes, and run payroll. While seasoned business owners recommend getting help with these tasks, many new entrepreneurs plan to tackle them on their own. Nearly half say they’ll be choosing their business structure and registering their business without any help. And 38% say they’ll be setting up their own financial systems.
And this DIY attitude extends to other tasks as well. Most seasoned business owners recommend investing in expense tracking and invoicing first. Most new business owners agree, but 1 in 4 plans to do these things manually.
Half of current business owners recommend investing in payroll software from the start. Payroll can be a business owner’s largest expense, and payroll mistakes are among the most egregious. But only 54% of new business owners plan to use payroll software. The rest plan to run payroll manually or figure it out as they go.
Setting up a payroll system is at the bottom of the priority list for new business owners. Old and new business owners agree that managing expenses, getting paid, and setting the right prices are top priorities. Current business owners prioritized setting up an accounting system at No. 4. But new business owners are more interested in getting funding and setting up payment systems than accounting or payroll.
3 tasks you should outsource to experts when starting your business
There’s something to be said about learning from others’ experiences. If you want to start a successful business this year, seasoned business owners say you should outsource these three tasks.
1. Setting up financial systems
Only 37% of prospective business owners feel they have the financial knowledge needed to run a business. Many fell into entrepreneurship when their side gig turned full-time. Others are finally following their dreams—dreams that don’t involve bookkeeping.
And yet, many new business owners plan to tackle financial tasks manually—without expert help or software.
But skimping on financial systems or taking a DIY approach can be an expensive mistake. According to seasoned business owners, it’s well worth the investment to get expert help setting up financial systems. These financial systems include things like expense tracking, invoicing, payment systems, and payroll.
2. Choosing a business structure
Your business structure influences how much you pay in taxes, the paperwork you need to file, and your personal liability. Choosing the wrong structure can result in tax consequences and other complications. And, depending on state restrictions, it may be difficult to change your structure later.
There are a handful of business structures to choose from. You’ve probably heard of sole proprietorships and LLCs. But there are additional non-standard structures that may be a better fit for your business. And the rules and requirements for standard structures can vary by state.
Seasoned business owners recommend seeking expert advice when it comes to choosing a business structure. And they’re in good company. The Small Business Administration (SBA) also recommends consulting with a business counselor, attorney, or accountant before deciding.
3. Registering your business
Once you’ve nailed down your business structure, it’s time to register your business. How you register varies based on your business structure and location. Registering can be as simple as filing your business name with state and local governments. If you’re self-employed, you may not need to register at all. But you may miss out on legal and tax benefits and personal liability protection if you don’t.
How you register determines what you can apply for in the future. Let’s say you want to trademark your business or product name or apply for tax-exempt status. You may need to register with the federal government. If you’re registering with a state agency, you may need to work with a registered agent. If you conduct business in more than one state, you may need to file in those states.
In short, how you should go about registering your business isn’t always clear. Seasoned business owners recommend getting expert help in completing this process.
Finding help for your new business
Deciding to get expert help is the first step. Finding that help is another story. Fortunately, help is closer than you think. No matter what you need to get your business started, your local SBA office or Small Business Development Center (SBDC) can help.
In partnership with the SBA, America’s SBDCs offer free consulting and at-cost training for new small business owners. Find your local SBDC to get help with business planning, compliance, and more.
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