Tips and Tricks on Starting a Business This Quarter: Incfile’s Planning Guide
It may take years for you to develop a business idea and muster up the courage to launch. So when you are finally ready to launch your small business, you don’t want to delay the process any longer. If the time for you to start your business is now, in the fourth quarter of 2020, you may be hesitant at first since the fourth quarter technically is when most small businesses’ fiscal year ends.
However, there are plenty of reasons why you should start your business during this quarter, and we have some tips and tricks that will lead you to business launch success.
Q4 Business Launch Callouts
Most entrepreneurs use the end of the calendar year as the end of their fiscal year. This means that Q4 is spent tallying profits, looking over financial statements, calculating potential tax projections and wrapping up planning for the upcoming year. Therefore, Q4 may not be the most desirable or popular time to start a business.
However, there are plenty of profits to be had during this season. Due to the holidays, consumers are willing to spend money on gifts and experiences. The increased sales potential during this season may help your business get off to a strong start. Holiday retail sales are likely to increase between 1 percent and 1.5 percent, according to Deloitte’s annual holiday retail forecast. During the same period last year, sales grew 4.1 percent.
However, Deloitte also forecasts that ecommerce sales will grow by 25 percent to 35 percent, year-over-year, during the 2020–2021 holiday season, compared to a 14.7 percent increase in 2019. And online holiday sales are expected to generate $182 billion to $196 billion.
In comparison to Q3 of 2020, consumers may have pulled back on their retail spending due to financial burdens caused by COVID-19. Especially since in August, 13.6 million people in the U.S. were unemployed, according to the U.S. Bureau of Labor Statistics.
During Q4, consumers are looking to spend their money during this holiday season. With an increase in the number of consumers looking for services online or online shopping this year due to COVID-19, more traffic online means you’ll have a great audience for your online ads. This makes it a great time to test out your online marketing tactics and strategy.
One thing to consider as a new business owner during this season is that more established businesses already understand that Q4 is a hot time for sales due to the holiday season. They may be charging hard and spending quite the penny to capture consumers during this time.
Also, since Q4 sales tend to trend the highest out of all the quarters, launching your business in Q4 gives you no other timeframe to compare against. This can give you a false sense of how your business is going to trend in other quarters or you may see a significant drop in sales during Q1 and Q2. Being realistic and conservative about your potential revenue during Q1 through Q3 will help you understand your business’s actual potential.
Launching Your Business This Quarter
There are plenty of things you can do to set your business up for success if you are not shied away from launching your business in Q4. Here are some tips and tricks if you are ready to take the plunge this season:
Utilize resources. Entrepreneurship can seem daunting but don’t worry. There are plenty of resources to help you start your business successfully. Incfile’s in-depth “Start a Business” guides help you research everything you need to do before your doors open. We’ve researched key areas for your industry, from market data, customer needs and business taxes, to setting up your business, understanding regulations and laws and choosing the correct business entity. We also have a handy “Start Your Business” checklist, which will walk you through the steps needed to get off the ground and running.
Focus on “hot” online business ideas. One business that we anticipate being hot during Q4 is an Amazon business. If you want to be successful on Amazon, especially during this busy holiday season, finding the right products and buyers is absolutely essential. Due to the success of the platform, there is a vast amount of competition across almost every niche and product. The biggest factors that will decide your success are choosing the right product, understanding the demand for that product and selling it at a profit. An Etsy business may also be a hot business since consumers turn to this platform during this season for special gifts. You’ll need a strong, robust plan for your new business. There’s plenty of competition in the Etsy marketplace, especially in Q4, so having a novel approach, creating original designs and getting proper business discipline in place is essential.
Get your website, social media and marketing plan in order. With shoppers online and poised to make holiday sales, getting a website and social media accounts ready to go will be necessary for helping you market to your potential new customers. Create a content marketing strategy for your website that involves SEO and special offers for your visitors.
Create a legal business entity. No matter what business idea you go with, forming a business, such as an LLC or S Corp, is a smart move. This will give you a professional face forward to clients and also provide separation of your personal identity and finances from those of your business. If you need to open a business checking account, credit card or loan, banks are more likely to see you as a legitimate business with an LLC or S Corp designation.
If you are ready to launch your business in Q4, go for it. Don’t let the increased competition during this time frame scare you away from building your dream. As long as you do your research, approach with level-headedness and commit the time, money and energy into your new business, you will hopefully see success this season.
Dustin Ray leads business development and growth initiatives at Incfile, a national incorporation service company specializing in business formation and small business services. Founded in 2004, Incfile has assisted in the formation of more than 250,000 corporations and LLCs.
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