Starting a business takes guts. Sticking with it takes grit.
Despite what glamorized business stories tell us, starting a business isn’t a get rich quick scheme. We can think of endless app and business ideas, but it doesn’t guarantee success. Overnight success is the exception, not the rule.
For the rest of us “mere mortals,” starting a successful business takes time, dedication, and emotional fitness. We’ll face challenges, fears, and frustration. How we react to these obstacles will determine our business’s ultimate level of success.
We also have to be realistic. Not all businesses are meant to succeed. Your initial startup idea may not be what makes your business successful down the line.
We need to be flexible. We need to be adaptable. Sound exhausting already?
Good, it means you’re understanding that business isn’t for the faint of heart. Our goal isn’t to crush your business dreams. We want to prepare you for the reality of starting a business so that you can succeed!
So, how long does it take to start a business? And, how long does it take for your startup to be a success?
Read on to find out!
How Long Does it Take to Start a Business? Our Expert Opinion
First, you’re a startup, then you’re a business. After that, your business hopefully turns into a profitable business success story. But, how long will it take to see growth and profit?
Explore the following ways to determine how long it will take to start your business.
What product or service will your startup focus on? Will you need to create the product from the ground up? Or is the product or service readily available?
The focus of your startup will be in the first step in determining how long it will take to start your business. The focus of your startup will either be a product, service, or a combination of both. If you have to build a product or service from scratch, then you can expect this phase to take much longer.
Tech startups, for example, may take longer to create their businesses simply because of the need to develop their product and idea beforehand. Selling existing products, on the other hand, allows a startup to skip the creation phase altogether. They can simply move on to the business particulars like creating a business plan and determining their business structure.
Business plans are a key factor to a business’s success. Not only do they give you as an owner an operation guide to follow, but they also help investors and lenders to take you more seriously.
Business plans cover a variety of topics and require a lot of research. Accurate research takes time and you certainly shouldn’t skip over this step! Researching and drafting your business plan could take anywhere from one month to one year depending on how complex your plan, finances, and business ideas are.
Experts also encourage business plans to be anywhere from 38 to 50 pages to 80 to 100 pages depending on the business particulars and needs.
The bulk of your business plan needs to include your market research and financial information such as a financing plan and current financial status. Other factors included are product or service description, business/marketing strategies, and a business structure.
Business Structure Set-Up
The next step in starting a business is setting up your business structure. Your business structure selection will affect your business’s taxes, amount of liability, and forms needed.
There are a number of business structures. Some of the most popular are Sole Proprietorship, Limited Liability, Partnership, and Corporations.
Sole proprietorships take little to no time to set up. But, all the liability rests with the individual.
The rest of the business structures require an application, filing fees, and other formal paperwork. Exactly what is required depends on your state. Since the state needs to process these forms, expect to wait anywhere from one hour to several weeks depending on your state’s filing processes.
You’ll also want to obtain the necessary permits and business licenses to operate legally. What licenses and permits you may need to depend on your business and the products or services you intend to sell or advertise.
Some business structures such as an LLC require you to open a business bank account. An LLC legally separates your personal finances from your business’s, but you also need to do your part by separating your finances on the backend.
It’s highly advisable to speak with a lawyer before selecting your business structure. A lawyer can also help you to make sure you obtain the correct permits and licenses.
Protecting Your Investment
Protecting your business is essential. Similar to obtaining permits and licensing to protect your business and operate legally, you’ll also need to invest in insurance. Obtaining insurance will protect your company from lawsuit expenses and unexpected events like someone falling at your store.
The type of insurance policies you need depends on your business operation. If you offer a service, for example, then you may want to consider professional liability insurance. If you manufacture a product, then product liability insurance is a must.
If your business operates out of a leased or owned brick and mortar location, then you’ll need property insurance. If a fire, theft, or storm occurred then most insurance policies would cover the loss to your inventory and office equipment.
If you have employees then you’ll also need workmen’s compensation. This covers your employees’ medical bills, disability, and death benefits if they are injured or die as a result of working with your company. Keep in mind, injuries can vary from mild to severe and workmen’s comp will cover these expenses when applicable.
Other insurance policies to consider are business interruption coverage, general liability, and vehicle coverage if you or an employee intend on using vehicles for business purposes for a fee.
The best thing to do is to speak with a reputable insurance company and agent. Insurance agents specializing in your industry will know what insurance coverages you absolutely need. They will also know how to tailor these policies to your specific business needs.
Securing Capital and Investments
Securing capital through funding, investors, or a business loan could take anywhere from a month to a few months. This is because of the time it takes to gather documents, meet lender requirements, and processing times.
Lenders will have a list of requirements which need to be met before they will give your business a loan. Luckily, most of these requirements will be met already if you made a thorough business plan.
Requirements include, but are not limited to, personal and business bank statements, tax returns, and financial projections if your business is in its early stages.
Online lenders may make this process faster, but they may also charge higher interest rates. This will especially be the case if your credit score is low. Raising your credit score in order to get the best loan rates will also take time!
If your company needs 1 million dollars or more, then you’ll need to look to venture capital. Finding a venture capitalist willing to invest in your business will take time, however.
Some businesses believe that creating a website is too expensive. Some think they don’t possess the technical skills needed to. But, the website builder industry boomed in recent years making website development cheap and easy-to-use.
Forget complicated coding and website development. Website builders such as WordPress and Wix now provide users with templates to use.
So, all you need besides the website itself is a domain name and a website hosting provider.
Websites are crucial in the Digital Age. Websites act as your marketing and business home base. It’s the place your customers go to purchase your products, connect with your brand, and absorb content.
Creating a website using a website builder could take anywhere from a day to a month depending on how complex your website is. After creating your website, you’ll also want to create and link appropriate social media business accounts to reach customers.
Building Customer Base
Once these initial steps are completed, it’s time to build your customer base. This is the phase where business owners begin scratching their heads. You jumped through hoops to get this thing started, now where are the customers?
And, why aren’t they breaking down your door to buy your product?
Just because you, your investors, and business partners believe in your business doesn’t mean your customers will. Building trust with customers takes time. They aren’t just going shell out their hard-earned money because your idea is cutting edge.
No, they need to build a relationship with you. And, just like personal relationships, this takes time. How much time depends on your exposure, encounters with your customers, and the quality of your product, service, and operation.
Your customers need time to learn who you are. The more you reach them through marketing efforts, the more familiar they become with your company. Just make sure these points of contact are positive!
This is best achieved through your marketing plan and strategies. Your marketing plan should include a branding strategy, target audience research, and a budget for marketing spending. It should also include marketing strategies to reach customers such as ad space, social media campaigns, and email marketing.
Building and maintaining your customer base will be one of your business’s top goals throughout its lifetime. Keep the customer first and your customer will become your best marketing tool. Word of mouth is still as powerful as ever!
30% of businesses fail within their first two years of operation. 50% fail within 5 years. And 66% percent fail within the first 10 years of operation.
Only 25% of businesses will be open 15 years and beyond. And, being “open” doesn’t guarantee a plethora of success and profit.
The top mistakes startups make are overconfidence in finding a place in the market, problems with their business plans, and not enough financing.
All businesses want to stay out of the red. But, getting out of the red can take years. This is where your emotional fitness is absolutely necessary.
Learning how to run a business, provide quality service, and develop your brand takes time. We’re talking years!
There will be an abundance of lows before there will be highs again. Your first year will be full of highs because you’ll be seeing immediate progress in your business’s creation. You’ll be checking off all the necessary steps like creating a business plan and securing a business location.
But, after your first year ends the real hard work begins. As well as more obstacles you’ll need to overcome to be successful.
Even if you have a plan, life and business don’t always follow it. You’ll need to learn how to be adaptable and how to bounce back. Learn from your failures and be realistically positive.
How Long Does it Take to Start a Business? Until It’s a Success.
So, how long does it take to start a business? Until.
Until it’s a success. Until it’s profitable and until you build a loyal customer base.
In theory, starting a business could take a day. Think of a kid starting a lemonade stand. But, if you want to rub elbows with profitable and competitive businesses then expect the startup process to take much longer.
Allow the startup process to take however long it needs to take. Your startup expenses, research, and planning is the foundation of your business. There’s no need to rush it, especially, if you intend on being in business for years to come.
Down the line, you’ll thank yourself for planning everything upfront. This will allow your business space to grow through new challenges instead of constantly starting back at square one.
Within your first year of business? Check out our blog post discussing 5 entrepreneurs who shared the best lessons they learned in their first year of business.