Around 90% of startups fail. And while some of those failures can be attributed to bad luck, many others were the result of poor decisions at the early stages of building the company.
But while that statistic may seem discouraging, it can also provide motivation to those entrepreneurs who are willing to follow the best practices of launching a startup and push through the various challenges that will inevitably come up during the process.
With the help of a few simple (but fundamental) strategies, you can separate yourself from the majority of other startups and give yourself a real shot of making a product that will break through and make a difference.
To help you get started, let’s look at four crucial aspects of launching a startup that you should consider.
Start with the “Why?”
The number one thing you should do when launching a new company is to ask yourself a simple question:
Why is this solution necessary?
There are millions of startups globally, and the majority of them would fail to provide a viable answer. Some just want to break into a hot market because they think that will increase their chances of success. Others believe they have a unique idea without knowing whether there’s any demand for it.
But in most cases, ideas that might seem reasonable at first glance crumble when their purpose is questioned even a little.
So, if you want to avoid pouring your heart and soul into a project only to find out that it was a waste of time, it’s a good idea to spend a fair amount of time thinking about the core purpose of your product and the effort it will take to launch it.
Most of the successful startups you might have heard in recent years started with a very clear idea of the purpose behind the company. It can be a feature that no other product in the market can offer. Or, it might be a unique process for solving a problem that will change the industry forever.
Most of the time, there’s at least a clear answer to why the startup needs to exist in the first place. If you strip away the gimmicks and the additional features, you should still be left with the core idea of what you can offer that no one else can.
Take Care of Your Employees
No matter how you decide to finance your startup, you won’t be able to go forward alone for long. And that means that at some point, you will need to figure out how you’ll take on employees and ensure that they are happy and protected.
Then, there are various state and federal regulations that determine how much paperwork you’ll need to file out, what protections you’ll need to offer, and countless other details that someone outside of the HR world has probably never dealt with.
Because of that, startups can benefit from using HR outsourcing services that can take over the entire process. The team at SnackNation recommends using services like Bambee or Workday, which provide comprehensive solutions for companies of all sizes.
These companies can offer HR consulting, benefits administration, performance management, payroll, bookkeeping, and various other services that can be a hassle to manage on your own when you’re just starting a new company and have a lot on your plate already.
Plus, it ensures that you implement the best HR practices of today and that your employees are taken care of. And that will make attracting the top talent you need for growth that much easier.
Use a Proven Website Platform
Launching a startup is impossible without a strong web presence. And that inevitably starts and ends with your website. But if you don’t have experience with building and designing websites, the entire process can be a bit overwhelming.
The good news is that with a platform like WordPress, you can have a website set up in a matter of days if you want something simple. But at the same time, the platform offers robust customization capabilities and it can get a bit confusing when picking the right ones. That’s why it’s a good idea to curate your own WordPress toolbox that includes a wide variety of powerful themes, plugins, add-ons and WordPress resources that you know would always work for your website.
In the end, you want to find fast hosting, install robust security features, and provide a seamless User Experience (UX) to all of your site’s visitors.
Designing a site from scratch can be appealing. But WordPress can give you enough versatility to get any features you need while remaining user-friendly enough to keep costs down and provide you with a simple way to get started.
As a startup owner, you will probably never run out of avenues you could pursue. Whether it’s the new shiny marketing tool or a promising networking opportunity, there will be times when you’ll want to do everything at once because that’s what could give the company the best chance of success.
But in reality, maintaining focus and clarity in terms of priorities might be the most practical choice for your startup in the long term.
By only focusing on a few things at a time, you will allow yourself to really give them time, tweaking your approach until you find what’s working. Moving on to something else is easy, but then you might miss out on incredible opportunities because you were too quick to dismiss something without giving it a real shot.
So, whether it’s a marketing approach or adding features to your product, always weigh the potential benefit against the resources it would require and against how it would impact what you’re doing right now.
Sure, at some point, you will need to cut your losses with projects that didn’t pan out. But it’s a good idea to stick with them for a bit longer than you might want to, especially if you know that it’s a sound strategy that could deliver big if you would just find the right approach.
Launching a successful startup is a dream that drives millions of entrepreneurs worldwide. But only those that follow sound business principles and are disciplined in their decision-making can expect to see success.
The strategies listed above may not be flashy, but they represent essential parts of running and scaling a startup. And sometimes, taking care of the less flashy details like HR management can set you up for exceptional results in the future.
How to Find the Right Business Coach — and Avoid the Wrong One
At its best, business coaching can connect you with a mentor and supporter who helps you generate ideas, make plans and execute on them.
But at its worst, a business coaching offer can cost you time, energy and money — without much to show for it.
Here’s what to expect from a business coach, how to find a coach that suits you and how to spot red flags.
What a business coach can do
Business coaches draw on their professional experience to help you set and achieve your own business goals.
“I’m here to help you, and I’m here to raise your level of knowledge in whatever way I can,” says Gary Robinson, who chairs the Memphis, Tennessee, chapter of SCORE. SCORE offers free business mentoring for entrepreneurs nationwide.
Some ways a business coach or mentor might do this include:
Offering feedback on your ideas and suggesting new ones.
Giving you templates and other tools that help you make plans.
Connecting you with resources in your region or your industry.
Giving you deadlines and holding you accountable to them.
Some business coaches may also offer coursework or group training sessions on particular topics, like sales.
Working with a coach should help you identify opportunities you hadn’t seen before or develop new strategies for pursuing those opportunities, says Sophia Sunwoo, who coaches women and nonbinary entrepreneurs through Ascent Strategy, her New York City-based firm.
“[Coaches] don’t necessarily have to have all the answers,” Sunwoo says. “But they are the people that know how to maneuver and create a bunch of different thinking paths for their clients.”
What a business coach can’t do
A business coach isn’t the same as a consultant, whom you would hire to perform a specific task. A coach or mentor could look over your business plan, for example, but they wouldn’t write it for you.
“If you were to hire me as a consultant, you would expect me to roll up my sleeves and pitch in and work with you to get things done, and you would pay me for that,” Robinson says. Coaches, on the other hand, “try to show you how to do things so that you can do them [yourself].”
Business coaches are also not therapists, Sunwoo says. Entrepreneurship can be emotionally and mentally taxing, but it’s important that coaches refer clients to mental health professionals when necessary.
Business coaching red flags
If a business coaching opportunity “promises guaranteed income, large returns, or a ‘proven system,’ it’s likely a scam,” the Federal Trade Commission warned in a December 2020 notice.
In 2018, the FTC took legal action against My Online Business Education and Digital Altitude, which purported to help entrepreneurs start online businesses. The FTC alleged these companies charged participants more and more money to work through their programs, with few customers earning the promised returns.
In both cases, these operations paid settlements, and the FTC issued refunds to tens of thousands of their customers in 2021 and 2022.
To avoid offers like these, the FTC recommends that you:
Be wary of anyone who tries to upsell you right away or pressures you to make a quick decision.
Search for reviews of the person or organization online.
Research your coach’s background to see if they’ve accomplished as much as they say.
Sunwoo says to also be skeptical of one-size-fits-all solutions. A coach should customize their advice to your personality and skill set, not ask you to conform to theirs.
“The moment that a business coach pushes you to do something that is really not compatible with your personality or your beliefs or values,” Sunwoo says, “that’s a huge problem.”
How to find the right coach — maybe for free
Here’s how to find a coach that will be as helpful as possible.
Determine whether you need advice or to hire someone. A coach isn’t the right fit for every business owner. If you need hands-on help organizing your business finances, for instance, you may need a bookkeeping service or accountant. And take legal questions to an attorney.
Seek out the right expertise. A good coach should be aware of what they don’t know. If they’re not a good fit for your needs — whether that’s expertise in a particular industry or a specialized skill set, like marketing — they might be able to refer you to someone who’s a better fit.
Consider free options. There may be some in your city or region:
SCORE offers free in-person and virtual mentoring in all 50 states, plus Guam, Puerto Rico and other U.S. territories.
See if your city has a Small Business Development Center, Veterans Business Outreach Center or a Women’s Business Center. All are funded by the U.S. Small Business Administration and offer free training and advising for entrepreneurs.
Do an online search for city- or state-specific programs. Philadelphia, for example, offers a business coaching program designed for entrepreneurs who want to qualify for particular business loan programs. Business incubators often offer courses or coaching.
Make sure your coach is invested in you. They should take the time to learn about you, your business and its unique needs, then leverage their own experiences and creativity to help you.
“I’m on your team now,” Robinson says of his clients. “Let’s do this together and make this a success.”
Are There SBA Loans for the Self-Employed?
Many of the same SBA loans are available to both self-employed people and more formally structured businesses, such as limited liability companies and corporations. However, self-employed individuals, like sole proprietors and independent contractors, might face a higher barrier to entry for having limited credit history, inconsistent revenue or no collateral. If they can’t qualify for an SBA loan, other business financing options are available.
Who qualifies as self-employed?
Sole proprietors, independent contractors and partnerships all fall under the self-employed category. In these cases, there is no legal distinction between the business owner and the business itself. Sole proprietors, for example, are solely responsible for their business’s gains and losses, while LLCs and corporations are legally distinct from their owners. This distinction helps protect the owners’ personal assets if their business runs into legal or financial issues.
Are self-employed SBA loans hard to get?
While a sole proprietorship is much easier to set up than an LLC or corporation, lenders may be more hesitant to finance them for a few reasons:
Self-employed business owners are legally responsible, as individuals, for any debt and liabilities that their businesses take on. If someone sues their business, for instance, their personal assets — not just their business — could be at stake. This makes it riskier for lenders to finance them.
Sole proprietorships and independent contracting businesses may have lower revenue or less collateral to offer since they’re often a business of one. This could make it more difficult for them to prove that they can pay back the loan, plus interest. And it may require more paperwork.
Some banks set lending minimums that surpass what a self-employed business owner is looking for, either because the business owner doesn’t need that much funding or doesn’t qualify for it.
Since there is no legal distinction between the self-employed business owner and their business, they may lack business credit history. To establish business credit, you’ll want to register the business, obtain an employer identification number and open a separate business bank account and credit card to keep your business and personal finances separate.
SBA loans for the self-employed
SBA microloan: Best for small loans and more lenient requirements
Applying for an SBA microloan is a great option for self-employed business owners, especially if they’ve been turned down by traditional banks and don’t need more than $50,000 in funding. In fact, the average SBA microloan is around $13,000, according to the SBA. SBA microloans are administered by nonprofit, community-based organizations that can also help train applicants in business practices and management. And because the loans are small, the application process may be easier — applicants may have limited credit history and typically don’t need as high of a credit score as they do for an SBA 7(a) loan.
SBA 7(a) small loan: May not require collateral
Funds from the SBA’s most popular 7(a) lending program can be used for a variety of business-related purposes, such as working capital or purchasing equipment. While the maximum SBA 7(a) loan amount is $5 million, SBA 7(a) small loan amounts don’t exceed $350,000. And if the 7(a) small loan is for $25,000 or less, the SBA doesn’t require lenders to take collateral.
SBA Express loan: Best for quicker application process
SBA Express loans are a type of 7(a) loan for businesses that need quick financing and no more than $500,000. The SBA responds to these loan applications within 36 hours as opposed to the standard five to 10 days, which may speed up the process for borrowers working with non-SBA-delegated lenders. Additionally, borrowers might not have to fill out as much paperwork — the SBA only requires Form 1919. Beyond that, lenders use their own forms and procedures.
SBA loan alternatives
Self-employed business owners turned down for SBA or traditional bank loans may be able to qualify for financing with an online lender. These lenders offer options such as term loans and lines of credit, and they often process applications faster and have more lenient requirements. However, applicants should expect to pay significantly more in interest than they would with an SBA loan.
Business credit cards
Not only can business credit cards help build your business credit history and pay for everyday business purchases, but they can also help finance larger purchases (within your approved credit limit). And if you qualify for a credit card with a 0% introductory APR offer, you’ll have multiple months to pay off the balance interest-free. Just make sure you’re able to pay off your purchase before the intro offer ends and a variable APR sets in.
9 Best Factoring Companies for Trucking
Factoring companies for trucking, also called freight factoring companies, give trucking companies cash in exchange for outstanding invoices. They can be helpful to trucking companies that need working capital quickly or don’t have the staff to manage invoicing and collections, but be cautious about potentially unclear costs and contracts.
Here are our picks for freight factoring companies, as well as additional information to help you decide whether this kind of small-business loan is right for your business.
Best trucking factoring companies for funding speed
These factoring companies for trucking offer some of the fastest funding times.
Time to funding: Minutes via its proprietary Blynk payment service; otherwise, same-day and next-day funding.
Good to know: Company factors freight invoices on nights, weekends and holidays. Its proprietary Blynk payment service, launched in 2020, allows customers to get paid via debit, Zelle or bank transfer. Apex specializes in small and midsize trucking companies.
Headquarters: Fort Worth, Texas.
Time to funding: One hour during the week.
Good to know: Company’s mobile app allows customers to submit invoices to be paid right from a smartphone. TAFS is a recourse-only factoring company, meaning that if the customer ultimately doesn’t pay your invoice, you pay the factoring company. In other words, you bear the risk of nonpayment. TAFS does factoring in several other industries too.
Headquarters: Olathe, Kansas.
Time to funding: Within 24 hours.
Good to know: Offers discounts to veterans. Also does factoring in distribution, staffing, oilfield, textiles and manufacturing industries. The company’s RTS Pro Factoring app lets customers upload invoices, submit invoices in bundles, use the camera to scan invoices and access reports. It also helps find fuel, tire and maintenance discounts.
Headquarters: Overland Park, Kansas.
Time to funding: The same day you deliver your load.
Good to know: TBS offers a program in which you can finance 50% of your truck insurance down payment through eight weekly payments from your factored invoices. The company also offers bookkeeping services.
Headquarters: Oklahoma City.
Best for trying freight factoring for free
These factoring companies for trucking offer customers a chance to use the service before fully committing.
Time to funding: First funding takes up to 48 hours but subsequent invoices process faster.
Good to know: Customers get an automatic, preapproved line of credit of up to $2,500 per truck. Transferring money from eCapital to your bank account is $10. The company also offers a 90-day free trial. Fees start at 2%.
Headquarters: Aventura, Florida.
Time to funding: Typically within 24 hours.
Good to know: Company says a $1,000 invoice will likely cost $25 to $40 (2.5% to 4%) in factoring fees. It also waives the factoring fees for your first invoice as sort of a free trial.
Headquarters: Carlsbad, California.
Best for upfront factoring pricing
Few factoring companies for trucking disclose their prices. These companies offer at least a peek.
Time to funding: Within 24 hours.
Good to know: Company does recourse and nonrecourse factoring. OTR Capital says it funds 96% of the invoice value, implying a 4% fee.
Headquarters: Roswell, Georgia.
Porter Freight Funding
Time to funding: Within 24 hours and sometimes sooner.
Good to know: Discounts available if you sign a six-month or one-year contract. Recourse factoring fees start at 3%.
Headquarters: Birmingham, Alabama.
Time to funding: Same day.
Good to know: Fees start at 2%. Works with startups and trucking companies with one to 100 trucks. No mobile app available.
Headquarters: Weatherford, Texas.
What is freight factoring?
Freight factoring is a process in which a factoring company buys your invoices at a discount and collects payment from the customers on those invoices. The arrangement creates a source of fast cash for the trucking company.
There are two types of factoring companies for trucking:
Recourse factors. If the customer ultimately doesn’t pay the invoice, the trucking company pays the factoring company. The trucking company bears the risk of nonpayment.
Nonrecourse factors. If the customer ultimately doesn’t pay the invoice, the trucking company doesn’t have to pay the invoice. The factoring company bears the risk of nonpayment, which is why nonrecourse factoring typically costs more than recourse factoring.
Do I need a factoring company for trucking?
A factoring company for trucking can be a source of quick cash, which could come in handy if a trucking company is having trouble making payroll or paying other bills, or if it doesn’t want to take out a loan or other financing. In addition, companies that don’t have the time or staff to deal with collecting money from customers might find factoring attractive.
Flexible — factor only what you need when you need it.
Credit score doesn’t matter.
May cost more than bank financing.
Company may come after trucking company if customers don’t pay.
How much do factoring companies charge?
Trucking factoring companies buy accounts receivable at a discount, meaning that trucking companies selling invoices won’t receive the full value of those invoices. The size of that discount is one of the key factors to consider when choosing a factoring company for trucking.
However, it’s rare to get an upfront price from factoring companies because they typically base their discount rates on a variety of factors:
Whether you want recourse or nonrecourse factoring.
Who your customers are.
The volume of the invoices.
Whether you want to pay a flat factoring fee (the same percentage fee for every invoice) or a tiered factoring rate (a lower fee on invoices that pay quickly and a higher fee on invoices that pay more slowly).
Whether the company also charges invoice submission fees or invoice processing fees.
For these reasons, it’s important to review the contract terms of any factoring agreement and make sure you understand the costs before you sign up.
Alternatives to freight factoring
Freight factoring is just one way to borrow money quickly. These other options might be viable alternatives for your trucking business.
Business credit cards
Borrowing money using a credit card gives you the opportunity to keep 100% of what your customers pay you. Credit cards can carry various rewards, such as travel miles or cash back, and a business gas credit card may make sense for a trucking company. But be sure you can pay your credit card balances off in full, because the interest charges may be higher than what you’d pay in factoring fees.
Business line of credit
If you need access to ongoing working capital, drawing from a business line of credit might be cheaper than factoring to cover short-term costs. You’ll likely have a higher spending limit with a line of credit than with a business credit card, but there may also be higher qualification hurdles to jump in terms of credit score and financial performance.
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