Business Creation Is Fraught With Challenges Says Kauffman and LegalZoom Survey: 9 Business Rules for Entrepreneurial Growth

In a survey released today, the Kauffman Foundation and LegalZoom released a Survey which Captures a unprecedented Picture of America’s Startups

The press release reads that data on newly formed companies and their founders are hard to return by, but an important element of measuring economic health. In an effort to benefit more concerning the challenges facing today’s entrepreneurs, LegalZoom and the Ewing Marion Kauffman Foundation surveyed 1,431 business owners who formed their companies through LegalZoom in 2012.

Ramon Ray  has found that to reach business, entrepreneurs there are some business rules that they should follow. These rules, available at  include

  1. Smile
  2. Be Honest
  3. It’s You Not Your Busienss
  4. Never Burn Bridges
  5. Listen
  6. Never Sit Alone: Network
  7. Get to understand Sneezers
  8. Show Value First
  9. Do Awesome Work
Of course business 101 of finance principles, leveraging technology, proper marketing, and understanding your customer are CRITICALLY essential.

Perhaps essentially the mostsome of the most interesting finding within the Kauffman and LegalZoom survey is that 60 percent of entrepreneurs within the sample spent greater than six months engaged on their business idea before forming their entity.

This highlights the blurry boundaries between paid employment and self-employment, demonstrating the need for public policy to be flexible in recognition of this economically vital stage of industrial creation.

“Policymakers, understandably, desire to discern how public policy may well be able to help remove obstacles entrepreneurs commonly face,” said Dane Stangler, director of research and policy on the Kauffman Foundation. “Forty percent of the respondents reported facing no regulatory or policy barriers in any respect and while it is encouraging, policy issues remain. Tax complexity and licensing regulations, in addition to continued
economic uncertainty, impede a few of the entrepreneurs inside the survey.”

In analysis of early-stage startup creation by age group, entrepreneurs 30 to 49 started businesses at a stronger rate than other age groups did. Of the complete sample, 57 percent had six or more years of prior industry or work experience before starting their companies and 44 percent had started companies in past times. Of these who had founded companies, 52 percent had started multiple.

Personal funds were by far the commonest source of commercial financing for entrepreneurs, with only 20 percent receiving loans from family, bank or home equity loans or funds from outside investors.

“With 80 percent of early-stage business owners using personal funds to finance their companies, founders are decidedly willing to tackle risk,“ said John Suh, CEO of LegalZoom “However, these business owners need additional financing in the event that they are to succeed in helping drive our economy forward. Of the 60 percent of respondents who said they faced business difficulties, 45 percent cite loss of access to credit.”

About a 3rd of startup owners within the survey were women. Although companies that reported higher revenues were much more more likely to be owned by men, those run by individuals with higher education levels tended to be woman-owned. Consulting and other service-based businesses dominated the represented industries.

As will be expected of companies that had operated for a year or less, the corporations were small on the subject of revenue and employees. Only 10.5 percent had revenues above $100,000, including 18 businesses with revenues more than $1 million. For 70 percent of the businesses, the landlord was the only real employee. Another 26 percent of the firms had between one and 4 employees.

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