A Guide to Starting Your First Business

According to recent Bureau of Labor Statistics findings, almost 20% of startups don't make it past a year. In other words, for every ten startup businesses, two are destined to fail before their first anniversary.

Follow this guide to start a successful business and be the lucky eight to thrive in an increasingly competitive market.

Analyze the Market

A business idea may seem lucrative initially, but it could also be saturated with competition. Survival in highly competitive environments is only possible if you have something different to offer your target audience. You can't know your unique selling proposition unless you're aware of what else is out there.

That's where market research comes in. Start with current data—use questionnaires or interviews to gauge whether people would buy a certain product or if they'd much rather pop into their nearest Target. 

You can also use current data, such as recent statistics or census, to analyze the market. Alternatively, you can replace all the research with a SWOT (strengths, weaknesses, opportunities, and threats) Analysis for an objective review of your product's potential and drawbacks.

Develop a Business Plan

A well-crafted business plan answers all the questions an investor or lender might have after you've pitched it to them. It's a roadmap to success and must have the following waypoint:

·Executive summary

·Products and/or services

·Market analysis

·Marketing strategy

·Financial plan

·Budget

Plan for the Future

By selecting your business structure, you'll indirectly decide the trajectory your organization will follow, the taxes you'll owe, and daily expenses.

Your business debts won't affect your private finances as an LLC. You must have licensed attorneys or accountants on board and partner with another entity as an LLP. You may not have to share the profits as a sole proprietor, but you'll be personally responsible for business debts. Finally, if you decide on a corporation, you won't have to be liable for your business debts and can file your taxes as a C or S corporation.

Understand the Complexities of Startups with CFA Charterholder Francisco Faraco

The above is only a preliminary understanding of starting your business. If you truly want to lead your own company and make it last, reach out to Francisco Faraco, who holds a CFA designation in New York.

Check out FINRA Francisco Faraco's national and international work, teaching assistant position at the University of Chicago, and CFA designation can help you become a boss like nobody's business. Literally!

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