Tips to Help You Start a Business in the New Year
(StatePoint) Millions of new businesses are formed nationwide each year and women of color are leading the charge. The Wells Fargo Impact of Women-Owned Businesses Report found that Black women are one of the fastest-growing groups of entrepreneurs in the United States, representing 14.8% of all women-owned businesses, and Hispanic/Latina women represent 14.3% of all women-owned businesses.
Steve Hall, vice president of Economic Development and Small Business Lending for Local Initiatives Support Corporation (LISC), a non-profit that connects under-invested people and places with hard-to-tap resources, shares these tips for ensuring your business will succeed in the new year and beyond:
1. Increase financial literacy. It’s important to have a solid working knowledge of credit, bookkeeping, projections, financial statements, reporting and financing to help you make sound business decisions. Free educational resources like Hands on Banking can get you started.
2. Be passionate. Running a successful small business requires round-the-clock dedication, so be sure it’s something you enjoy and are passionate about.
3. “Run the idea.” Speak with a business banker about your business plan, ways to fund your operations and how to establish credit. A strong relationship with a business banker can help set you up for success. They can guide you toward the right financial products for every stage of the business, identify potential barriers you may face, help you find capital and help you avoid predatory debt collectors. Likewise, a certified public accountant can advise you on what paperwork you need to file to start your business, how to structure your business and how to manage monthly financials and taxes. They can also help connect you with the right vendors.
4. Seek out capital. Capital is the fuel to start and grow your business. More credit options can be the difference between survival and closure. In addition to traditional lending, working with community development financial institutions and minority depository institutions can create an ecosystem of support that provides additional avenues to accessing capital. These institutions specifically work with underserved entrepreneurs, including those in low-to-moderate income areas and minority populations.
Thanks to new efforts, more small businesses have a shot at success. Through its Open for Business Fund, Wells Fargo is helping to create greater access to capital and resources. This industry-leading effort has donated roughly $420 million to nonprofits that serve small businesses. Since the fund was created, Wells Fargo has given grants directly to community development financial institutions and provided more than $50 million to nonprofits to support entrepreneurs with technical assistance. In the program’s third and final phase, the focus is on funding nonprofits to assist small businesses in growing equity in their business, with money going to strategies such as acquiring property and equipment as part of physical business improvements.
5. Solicit trusted advice. Check out LISC’s webinars, local networking events and online resource center. No matter what industry you’re in, SBA.gov and your local chamber of commerce can also be helpful. For guidance in accessing capital, lean on Business Development Organizations, which serve as trusted ambassadors to underinvested communities, guiding business owners in accessing loans and resources.
“It takes passion and grit to start and grow a business. It also takes planning, important financial decisions and a series of legal steps,” says Hall. “Fortunately, a range of resources exist to guide an entrepreneur through the logistics of turning their dream into a reality.”
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