Many people dream of being their own boss, having flexible work hours and bringing in a good income. However, starting and running a business is not all fun vacations and fat bank accounts. In fact, it can be very challenging. It requires the ability to juggle multiple tasks and to make decisions that can have profound consequences for one’s livelihood. It also takes a lot of time and money, and it isn’t always easy to find a way to turn a good idea into a viable business.
To start a new business, you have to choose between a sole-proprietorship and a corporation (limited or public). Typically, the type of business will dictate whether you need to register your company with a government agency. Regardless of which option you choose, it’s important to understand the different stages of business creation and how they can impact your success.
A business is usually started to solve a problem that isn’t being addressed by the existing market. The solution can be as simple as a product that makes life easier for customers (like Scrub Daddy or the Squatty Potty). Often, successful businesses are created because of something that frustrates the founder personally. This can be anything from a bad customer experience to not being able to find the right dress for an event.
Some economists argue that economic downturns are good times to start a business, as competition might be low and the cost of inputs like labor and supplies might be cheap. Others argue that business creation is a choice, and that entrepreneurs will seek to start a business when they see an opportunity.