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Six Essential Startup Tips for Young Entrepreneurs

Prev2 of 2NextUse your ← → (arrow) keys to browse Most entrepreneurs will find that starting a new business can be challenging. Let alone young entrepreneurs who, though...

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4. Select a Business Entity

One of the first decisions every entrepreneur must make is how to legally structure their new business venture. Should it be set up as a sole proprietorship, corporation, or limited liability company (LLC)?

The type of legal business entity you choose will determine the fees, application requirements, taxes and continuous annual housekeeping. It is important to fully understand the pros and cons of each business entity in order to choose the one that is right for your long-term goals.

 

5. Get Financed

Depending on the size of your business, it may not take a huge amount of capital to get started. The first step to financing your company is to estimate startup costs. Your new startup budget should consider technology requirements (e.g. laptops, web hosting, mobile devices), general office equipment, supplies, labor and everything in between.

Perhaps the most important line on your itemized startup budget is the amount of cash flow that will be needed to keep the new business afloat until profits are generated.

Once your cash flow estimates are established, there are a few different options for obtaining financing:

  • Bootstrapping: You can dig deep into your own pockets to come up with the start-up capital, perhaps by using credit cards or tapping into savings. Generally speaking, this method requires independence given you don’t have to answer to VC’s or angel investors. On the other hand, utilizing your savings or taking out business loans have various levels of associated risks.
  • Microloans: These are small, short-term business loans that can either be acquired through a bank or through the backing of SBA. Although microloans reduce personal financial risk, they can be hard to secure if you have a limited or bad credit history.
  • Crowdfunding: In recent years, crowdfunding has become a very popular way to raise start-up capital without financing or direct lenders. Instead of an obtaining a large sum of money from one source, you can receive multiple small donations from many sources. Through online platforms including Kickstarter and Indiegogo, many new business ventures have been launched by regular people who want to contribute to a business idea that sparks their interest.

6. Register Your Small Business

When it comes to registering a business, there is generally a 4 step process: Register your “Doing Business As” (DBA) name, register for state and local taxes, register for permits and licenses, and apply for an EIN number, or tax identification number.

 

The SBA course is a great way for new small business owners to get in the right mindset with proven tools. Also nothing beats the security of knowing that things are done the right way, the first time.

 

Julian Hooks is a small business enthusiast as well as a young entrepreneur. He writes on topics such as business management, marketing, and entrepreneurship. Through U.S. News University Connection, he strives to help professionals and students achieve their goals and provide access to the information & education they need to achieve them. Connect with U.S. News University Connection on Twitter.

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