The US Census Bureau has released new information about the business formation statistics in the US for May of 2022. There were 420,586 new businesses formed in the US in the month of May 2022. This represents a 0.6% decrease in business formations on a seasonally adjusted basis since April of 2022. This is largely due to a decrease in the number of business formations in the South and Midwest areas of the US. However, the West and the Northeast both saw increases in the number of formations. Additionally, the number of high-propensity businesses and the number of businesses with planned wages both increased by 1.8%.
The US is an incredibly popular destination for entrepreneurs to establish new businesses thanks to the business friendly environment of the country and its substantial and affluent population. On top of this, the US is widely regarded as the business hub of the world for many industries being home to centers of commerce and innovation like Silicon Valley and Wall Street. Many international entrepreneurs wish to establish a business in the US because of these factors as well as the economic stability which the country is known for. Establishing a business in the US can be daunting but this article will break down some of the most important considerations for entrepreneurs seeking to establish a US business.
Market Research
Before establishing a new business in the US an entrepreneur should conduct market research to ensure that there is a need for the product or service which they wish to sell. This can be achieved in a number of ways but the most important factor to establish is that there is a market for the product or service. Some products or services may not be suited for the US market due to the specific needs of the local market. Additionally, the process of market research is a good place to start understanding the customer base of the business and how an entrepreneur’s business can effectively market towards its target audience.
Market the Business
One of the best ways to ensure that a business succeeds is by marketing the business effectively to its target market. Effective marketing can take a number of different forms depending on the target market of the business. There are certain tools which every business can benefit from such as a business website and a social media presence. Additionally, SEO is a reliable tool for organically generating traffic to a businesses website. There are also other more specific methods of marketing such as attending industry events, developing a network and using referrals to increase sales. To market a business, an entrepreneur must first decide on the type of business entity they wish to create.
Choosing a Business Entity
There are two common business entities which entrepreneurs choose in the US. These are a limited liability company (LLC) and a C corporation. Both of these business entities provide what is known as limited liability asset protection. This means that the liabilities of a business are limited to that business and that the owner of the business is not responsible for the liabilities in a personal capacity. The main difference between an LLC and a C corporation is the manner in which ownership is structured. In an LLC, owners are called members and they cannot change over time. In a C corporation owners are called shareholders and ownership can be transferred with far greater ease than an LLC. However, a C corporation comes with a much greater degree of administrative work in both its establishment and its maintenance.
Establishing either one of these business entities is not necessarily a straightforward task and this is why many entrepreneurs choose to use business formation services for this task. There are a plethora of business formation services available and it can be difficult to decide which service is best for an individual. This ZenBusiness Review breaks down the pros and cons of the service to give entrepreneurs a better understanding of how the service functions and what it provides.
Final Thoughts
Establishing a business in the US is an exciting and challenging prospect for any entrepreneur. There are three things which any entrepreneur should be prepared for before establishing a new business and these are: conducting market research, understanding how to market their business effectively and which business entity will best suit their needs. The correct implementation of these three aspects of business will help any entrepreneur set themselves up on the path to success.
