Starting a new business is an exciting and risky decision. As many small businesses experienced the hard way, the pandemic created a very abrupt and painful end to many dream ventures that were not financially prepared to ride the shutdowns. The devastation from COVID-19 was brutal and it is estimated that around 30% of all businesses in the United States closed in 2020. This number reached as high as 44% in April 2020 — around the same time the first stimulus payments were being made.
Why is this important to know? Understanding the economic conditions of the market is one of the first things you must do before opening a small business. You never want to go on a hunch; get your data first. No one could have predicted the economic freight train that was upon us when COVID-19 shook our lives, but there were many lessons to apply in case you are starting your small business this year.
We are going to rely heavily on our federal, state and local leaders to provide a sound foundation upon which entrepreneurship can truly thrive. Necessary financial resources, technical assistance, flexible regulations and a new vision for the economy will be required once vaccines are widely applied and the pandemic is truly behind us.
In the meantime, here are five resources you need to know about so you can start your business on the right foot.
- Know what and where you need to register your business. Your new business will need to acquire several legal filings to ensure it is properly set up. Most businesses start by registering an LLC at the Corporations Commissions, then acquire a tax identification number with the IRS, and then county or local tax permits to sell. It is relatively affordable to make your business filings on your own. Make sure to hire an attorney or tax accountant to help you structure your business for your situation.
In Arizona, there is a great checklist tool to help you decide which legal business filings you will need. Check out the Arizona Commerce Authority for its Arizona Entrepreneurs’ Edge book or online checklist.
- Know what the new COVID-19 safety regulations are. The safety of your workers and customers is top priority. There are many community organizations that provide free CDC training to help you understand what you will need to do to create a safe workplace. Check out the Reopen with Confidence Program, a free virtual course for owners, managers and employees who wish to learn about cleaning and disinfecting public spaces, workplaces, businesses, schools and homes.
The U.S. Chamber of Commerce also provides a comprehensive toolkit to navigate during a pandemic.
- Know where to find funding to help you grow. There are many funding sources to help you start or grow your small business. The recently enacted coronavirus stimulus bill is designed to help, providing $900 billion in assistance to businesses and individuals. The bill includes aid in the form of tax credits, loans and grants.
Talk to your bank and ask about startup loan requirements and study its checklist. You will want to be ready with a business plan, credit report and financial statement to get an investment from a bank. There are many SBA-approved lenders ready to help.
- Plan to make your business green from the start. Sustainability principles in business are here to stay. Nowadays, most consumers prefer to do business with those that make a commitment to some form of green principles. Consider learning more how your triple bottom line or three P’s (people, profit, planet) can apply going green principles. This will position your small business with a competitive advantage in your industry.
The City of Phoenix Green Business Leader Program recognizes and promotes businesses that volunteer to operate in a more environmentally responsible manner through sustainable actions. Businesses receive many benefits to be a part of the program. This program started through the Reimagine Phoenix initiative, which is the city’s public goal to increase its waste diversion rate to 40% by 2020. The program also assists the city in reaching its eight overarching 2050 Environmental Sustainability goals.
- Know where to get technical assistance. As a new business, getting consulting or coaching may seem expensive at first, but if it can help you prevent thousands of dollars in mistakes, is it still worth it? If you have not budgeted for a business coach, do not worry; there are many free resources to get help.
Explore SBA-backed business centers like the new CPLC Women’s Business Center or the Maricopa SBDC. Each has business experts to help you with individualized coaching, lending, financial management, digital marketing and more. Also, explore membership organizations like ASBA, they have made networking with other businesses much easier during COVID-19 as well as offering a long catalog of virtual webinars to help business owners.
Think of these as your guardrails to help you stay on the right track to launch and grow. As a business owner, having access to resources like this could be the difference between success and failure.
EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.
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