The time taken to start a business is not set in stone. It varies from business to business, some taking a few months while others take years. You can be sure it’s not an overnight process.
A lot goes into starting a business, and it happens in the background, which customers never see. Despite the glamorized business stories you hear, you can’t sleep, dream about a business, and have one the following day. The fact is that starting a business takes time, guts, and grit.
The goal of this article is not to crush your dreams but to prepare you for what is to come and the reality of going this route. Aspiring entrepreneurs often beat themselves, asking, ‘How long does it take to open a business?’ If you are one of them, keep reading as we explore nine factors that can affect the time it takes to start a business.
1. Determining Your Business Concept
If you are asking yourself how long does it take to open a business, you probably have a few business ideas in mind. The time taken from concept to actualization will depend on how long you take to refine your ideas. Usually, as an aspiring entrepreneur, you will have endless business ideas.
While some ideas may be good, not all are viable and practical. According to The Chamber of Commerce, roughly half the businesses that start fail within the first five years. While there are many reasons, one is that the business ideas weren’t practical and scalable from the start.
You first need to take time and narrow down your options to a few things you can monetize. They don’t have to be exceptional or require over-the-top ingenuity. But can they generate interest and make money? The more specific and well-defined your concepts are, the faster you can move to the next step.
A general business advice is to monetize what you love. However, business is not entirely about where your interests lie. You must look at other elements, such as possible profitability and skills. For instance, if you would like to venture into real estate for sale, is it a viable idea in your area, and do you have the academic qualifications? Take time to determine if your business concept is genuinely possible and sustainable in the long run.
2. Researching Your Competitors and Market
When pondering how long does it take to open a business, one must recognize the critical role of market and competitor research. Honestly, research takes time, and there is no telling how long it will take. Most small businesses ignore it altogether due to perceived hassles.
But to succeed in your business, you need a deeper-than-surface understanding of your customers and competitors. You can’t afford cursory glances at what others are doing and call it research. You must delve deeper into your potential buyers’ minds, needs, and wants. That’s the only way to tailor your goods or services to appeal to customers and edge out competitors.
If you wish to start a business in the delivery services field, you must thoroughly research the best delivery company around you. There is no shortcut to this. While it won’t guarantee success, it gives you the confidence that what you’re about to start has a chance and is doable.
According to the U.S. Census Bureau 2024 Business Statistics, the country saw a surge in new business registration with a record 5.5 million applications. Many of these startups will compete against each other and other already-established businesses for the same customers. Those who fail to take time and research their target market will likely close shop sooner or later. Therefore, as much as it might delay your plans, research is your binoculars to where your business is heading.
3. Writing Business Plan
How long does it take to open a business? Well! That depends on how long you take to prepare a business plan. A business plan is like a roadmap for startups. The document outlines all the processes involved in the business and how you will move from one point to the next systematically.
Yes, you have all the ideas in your mind, but it’s not until you lay them down on paper that you can see if they make sense. Plus, it’s the only way to explain to others what you want and are about to do. That is especially helpful when pitching to potential investors and financial institutions. For instance, if you buy a property for sale and get it to generate profit, the only way to show, without hours of explanation, is through a business plan.
It’s true that some big businesses didn’t write a business plan when they started, but they eventually prepared one when they wanted to scale. For example, Apple didn’t have one until they needed $250K financing. Microsoft didn’t have either. While you can start without it, you’ll eventually write one.
How long it takes to prepare a business plan depends on the size and complexity of your business. A 38 to 50-page document takes less time to write than an 80 to 100-page one. The content inside will also affect how long you take to complete it.
4. Choosing a Business Structure Set-Up
As you are wondering how long does it take to open a business, consider the time it takes to set up a business structure. Your chosen structure will significantly impact major things in your startup, such as taxes, liability, and operations. It will also affect the complexity of your paperwork and the level of control you have.
The most common business structure is sole proprietorship. It’s easy to start and will take less time to do paperwork. However, it poses a risk to assets in your name in case of a lawsuit or business loans. Others include Limited liability Companies (LLCs), Limited Liability partnerships (LLPs), and Corporations.
If you want to have investors, or you’re partnering with other entrepreneurs, an LLP is ideal. The paperwork is tedious and may take longer than required in a sole proprietorship. For instance, an LLP will require you to craft a partnership agreement if you want to build a property for sale with a fellow realtor. While it might not seem like much, it affects the time it takes to actualize the idea.
5. Registering Your Business and Getting Licenses
When contemplating how long does it take to open a business, it is essential not to overlook the process of registering your business and obtaining the necessary licenses and permits. The duration here depends on your business’s nature and local state laws. Small everyday businesses are straightforward, and it’s just a matter of weeks, if not days.
However, if your business needs things like trademark and patent approval, it might take longer to get everything done. The same applies to companies in highly regulated industries such as healthcare. Additionally, it would take more time if you want to file for a Doing Business As (DBA), where you operate under a different name other than the legally registered name.
Furthermore, obtaining the necessary zoning permits would take time for businesses requiring local land in industrial zones. That’s because of the extra paperwork and the legal processes involved. Therefore, if your business idea lies in such sectors, be patient.
6. Securing Capital and Investments
Perhaps the most significant factor that affects how long it takes to open a business is the ability to secure capital and investments. There are many ways to fund your business, some easier and others requiring considerable effort. Time is not a given in this.
So, how long does it take to open a business like a tuck shop? First, the startup is simple and requires little capital. That means personal savings, credit card loans, or contributions from friends would suffice. It would take less time to get the capital needed, probably even a day for the most part.
On the other hand, if you want to build an estate for sale, the capital needed is enormous and would not be an out-of-pocket kind of money. Such a business requires not just business loans but venture capital. The thing about business loans is that banks take time to evaluate your business idea and security assets.
If you are looking for venture capital (V.C.), consider the time spent pitching to investors, negotiating, and drafting contracts. It’s a viable option, especially if you need mentorship and connections to succeed. According to Statista, VC reached $240.9 billion in 2022, meaning investors are willing to fund businesses.
7. Applying for Business Insurance
Understanding how long does it take to open a business also involves recognizing the time it takes to apply for and secure business insurance. Insurance is integral, even if you are starting a home-based business that has no employees. A startup is risky, and you need to safeguard it from unforeseen risks and liabilities.
The timeframe for obtaining business insurance varies wildly, depending on the type and extent of coverage. You can get a basic policy like general liability insurance fairly quickly, sometimes within a day. Most digital insurance enrollment platforms will offer a quote the same day you apply. The good part is that it’s not that expensive. According to Forbes, small business insurance costs $14 to a few hundred monthly.
Complex policies covering specific business risks, such as product liability insurance and professional liability, require detailed assessments. In this case, the insurance provider needs time to evaluate your business and determine the level of risk involved. This process can take a few weeks or even months to complete.
8. Getting the Right Business Tools
Business tools are a necessity in this digital age. They smoothen your operations and speed up processes. The irony is that, despite being agents of time-saving, getting all the necessary tools takes time and affects how long it takes to start your business.
While setting them up requires minimal effort and may only take a day or two, identifying and selecting the right tools takes time. System options are endless; sometimes, trying out each can be overwhelming, especially if you’re looking for budget-friendly ones. Even without diving deep into the learning curve, you can already tell time is a factor here.
Business tools are not a one-size-fits-all kind of thing. Each business has unique needs and budgets. For example, if you want to build a property for sale, you will need a very different tool than someone starting a law firm. Even simple things like accounting tools vary depending on the type of business and how you invoice clients.
Some business tools you might need include accounting software, customer relationship management (CRM) software, and point of sale. You may also require project management software, a credit card processor, email hosting, merchant services, and a virtual private network (VPN). Getting all of them, setting up each, and familiarizing yourself with them takes time.
9. Marketing Your Business
If you are pondering how long does it take to open a business and thinking of marketing as optional, then you’re setting yourself up for failure. The real work is here; honestly, it’s not an overnight thing. It’s more than just creating flyers and placing ads on social media platforms. Marketing is a continuous, time-consuming process that requires research, planning, and implementation. You can even make an advertisement poster today and implement it twelve months later when appropriate.
The first step towards marketing is creating a website. Custom web development involves building a functional website as your digital presence. An online presence is necessary even if you want to start a brick-and-mortar business. According to Forbes, about 71% of businesses in 2023 had a site.
A website helps you market your startup business with search engine optimization (SEO). However, the SEO marketing strategy is long-term and takes time to show results fully. So, when starting a business, consider the time factor in marketing.
After that, consider content marketing solutions to market your business. This strategy involves creating quality content through blog posts, videos, testimonials, and demos. It’s critical in a time when almost everyone has a digital device.
Also, consider going to a custom print shop and creating promotional material such as T-shirts, Caps, Cups, and Pens. You can then give them to your customers or employees to market your brand offline. According to GITNUX, people have an 85% chance of remembering a business after receiving promotional material. Such efforts take weeks and sometimes months, affecting the time needed to start a business.
So, how long does it take to open a business? The simple answer is it depends. Factors such as the business type, size and complexity, availability of resources, and preparedness affect time. While it shouldn’t take you forever, you should also not rush into it. Take your time to plan, evaluate, and execute each step carefully.