When people decide to start their own business, they have a few choices. Some may have had a project bubbling inside them for some time, while others will simply be attracted to the entrepreneurial lifestyle. Whichever path you take, it is important to understand the realities and risks of entrepreneurship.
First, you need a good idea. This might be something that fits well with current consumer trends, or it might be a new way to do an old business that can compete with existing brands. Either way, you will need to spend some time brainstorming, and doing some preliminary research. Identify what other businesses in your market are doing and how you can deliver something better (or cheaper).
Next, you need to do some legal work to launch your business. This will typically include choosing a registered agent who can receive legal documents on behalf of your business, and applying for a federal employer identification number (EIN). You will also need to establish the rules and procedures that will govern your business.
There is a school of thought that downturns are a good time to launch a business: competition might be weak and inputs cheap, for example. But the 2020-21 startup surge, at least according to data from the Kauffman Foundation and the Census Bureau’s Current Population Survey, does not seem to fit this narrative. In fact, the share of startup applications that are projected to become employer firms has been lower than pre-pandemic levels.