The past year was challenging on many fronts, but for entrepreneurs it was a banner year that shows few signs of slowing down in 2021. The 24% rise in applications for new business formation over 2019 marked the biggest increase on record, with 4.4 million business applications filed. And according to Inc. Magazine, entrepreneurial creativity may keep this trend going.
In contrast to the recession of 2008, when there were few financial reserves available, the generous infusion of governmental support sparked a boom with investment potential. And there are several factors in place that may keep the momentum going:
- The Generation Z demographic, which has already watched layoffs and drastic changes to office norms with a year of telecommuting, are likely to want to branch out on their own.
- Multivendor platforms and social media facilitate connections between business owners and their customers, spreading the word quickly through social media.
- Talented employees who were laid off as short-term cost-cutting solutions during the recession would rather be their own bosses or join a small business than go back.
- The push for businesses to be more technologically advanced has created niches for innovative tech solutions that will continue to provide opportunities for entrepreneurs.
Starting up a new business in Nebraska
For entrepreneurs hoping to start a new business in Nebraska, there are a number of decisions to make that will prioritize the specific needs of the business. As part of business formation, choosing what operational or management structure to have, liability and ownership interests as well as the tax implications of each, requires knowledge and solid planning.
The most common types of business structures to choose from are:
- Sole proprietorships, which have one owner, carry the greatest liability for the owner as the business is not a separate legal entity
- Partnerships, with two or more co-owners sharing profit and loss on their personal income tax, also hold partners personally liable, but a limited partnership provides limited liability for some of them
- Corporations, which are separate legal and tax entities whose owners are shareholders, with limited liability and a managerial structure that oversees operations
- Limited liability companies, which limit the liability that owners take on and have tax advantages in allowing profits and losses to pass through to individual owners.
It is important to take advantage of skilled legal services serving Omaha and surrounding areas to assist with entity selection and the filing of formation documents, liability and insurance concerns, as well as many other details as part of starting the new business on the right footing.