Are you dreaming of starting your own business but hesitant to get things moving? If so, you’re not alone. Many future entrepreneurs face the same concern, never quite sure if now is the right time.
Despite the challenges for many small businesses in the past couple of years, 2023 shows signs of promise. This is particularly true when you consider the following reasons you should start a business in 2023.
Why You Should Start Your Business in 2023
1. Technology makes it more affordable
Entrepreneurship is challenging but today’s small business owners will find that the tools needed to open and run a business are often well within their budget and easy to use. Some are even free.
This is all thanks to a boom in technology, specifically apps, that have simplified a lot of the work that once would require you to hire employees or contractors with very specific skill sets. From website design tools to accounting software to payroll services, there are numerous apps that make it possible to create a professional business presence on a modest budget. Not to mention, implementing an online marketing plan is easier than ever.
For small business owners, this makes it possible to turn a side hustle or a hobby into a business without the need to hire teams or add a significant cost to what’s likely a small budget.
2. Tax benefits may save you money
There may be a variety of tax deductions that can benefit your startup. For example, Qualified Business Income Deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.
Other tax deductions, such as the home office deduction, business mileage, and more can save you money as you start and grow your business. IRS.gov provides valuable information on small business taxes and tax deductions, and you can use online accounting services to help you track expenses and take advantage of potential tax benefits.
3. It can be easy to connect with customers
Social capital — or your networks — can be a key component of small business success. In order to have a successful business, you’ll need to have an engaged and growing customer base. Creating a presence on one or more social media networks can help you cultivate and grow an engaged base of new and potential customers. LinkedIn or Twitter could be great for professional connections, for example, while Instagram or Tiktok can be a great way to build an audience for retail products. If you ever decide to use crowdfunding to raise capital, those networks may be key to your success.
4. You may be able to get business financing
You don’t need to use all your savings to start a small business — you may be able to get small business loans or other financing instead. Whether you need a small business credit card, a line of credit, or a term loan, there are options ranging from online lenders to traditional small business lenders like banks that you may qualify for.
5. Market research has never been easier
A strong network and a unique business idea are great, but you have to find people who want to buy what you sell.
Before you go into business, it helps to do basic market research to determine if your product or service meets the needs of potential customers. To do this, you’ll need a firm understanding of your target audience, competition, and any related industry or consumer trends.
This may sound complicated, and if you take a deep dive into market research, it certainly can be. Many small business owners can use easy-to-access tools like Google to get some basic market research, or other resources, like SEMRush and Tableau Public, to dig a little deeper without spending a ton of money. The US Census Bureau offers the Census Business Builder, a free suite of tools for small business market research as well.
6. You can start small
Many businesses today start as “side hustles” where the owner works a job while building a business on the side. This can be an excellent strategy if you are strapped for cash, or you need to maintain health insurance through your job until your business is self-sustaining. It can also allow you to build your product or service and conduct market research before you quit your day job.
7. Great businesses are for sale
You don’t have to start a business from scratch. There are thousands of businesses for sale, ranging from local service businesses to online businesses. Buying an existing business (perhaps even the company you work for) may be an excellent way to jumpstart business growth.
8. You can get free help
There are numerous organizations that will help you launch your new business for free. They can help you research and create a business plan, flesh out your business model, access market research tools, create a social media and marketing strategy and more.
Get free help from your local Small Business Development Center (SBDC) and/or SCORE. Both organizations are resource partners of the US Small Business Administration (SBA). Find local help here. There may be local government agencies that offer free small business assistance as well.
Downside to Starting a Business
There are potential drawbacks to starting a small business in 2023 you need to consider:
- Interest rates have been rising, which means it is more expensive to get small business financing.
- A labor shortage in many industries makes it challenging to find and retain employees.
- Supply chain challenges continue to make it more difficult and expensive for many businesses to get parts or inventory.
Be prepared by creating a solid roadmap for your business. That should include a solid financial plan.
Pros and Cons of Starting a Business in 2023
- Save money by using technology
- Get tax benefits
- You may be able to get funding for your business
- You can start on the side
- There are many resources that can help you
- Higher interest rates
- May be hard to find employees
- More challenging to get supplies
Step-by-Step Guide to Starting Your Small Business in 2023
If you’ve decided to start a small business, there are some essential steps you’ll want to take as soon as possible:
1. Choose a business name. Research what business names are available on your state’s Secretary of State (or similar agency) and find out what state-specific requirements there are for registering your business name. You’ll also want to check social media handles and the U.S. Patent and Trademark website to make sure your name won’t infringe on other trademarks.
2. Form a business entity. You can start your business inexpensively as a sole proprietorship, but it’s smart to form a business entity such as a limited liability company (LLC), S corporation or C corporation as soon as possible. A legal structure may protect you from personal liability for business debts or activities, and may make it easier to grow your business and get small business loans.
3. Get an EIN. An employer identification number is a federal tax id number for your business, similar to the way your Social Security number is your identifier for your personal taxes. It’s not always required to get one if you are self-employed, but it can be helpful to have, especially if you want to apply for business financing.
4. Get business licenses. Depending on the type of business you create, and the jurisdiction in which you operate, you may need a business license, professional license, occupational license or others.
5. Get business insurance. Having the proper business insurance, including liability insurance is a must, whether you operate as a sole proprietor or have a formal business structure.
6. Open a business bank account. Using a business checking account for your business expenses and income. You’ll find that incredibly useful for tax purposes as well as to understand your overall business financial health.
This article was originally written on January 15, 2019 and updated on February 17, 2023.