Most New Business Ideas Hatching for 6 or More Months
A new report shows that most new business owners spend months working on their business plan prior to starting up.
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Entrepreneurs have to be risk-takers, to be sure. But that doesn't capture the whole picture. Many are also planners.
Six in 10 people who started a business in the past year spent six or more months working on a business idea before they even applied to form their business into a legal entity, according to a new survey from the Kansas City, Mo.-based entrepreneurship organization Kauffman Foundation in partnership with the legal-document service company LegalZoom.com.
The Startup Environment Index, released today, is the first report of its kind and surveyed 1,431 business owners who formed their companies through Glendale, Calif.-based LegalZoom.com in 2012.
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Only nine percent of the businesses surveyed spent less than a month working on their business idea before forming it into a legal entity. About a third of businesses surveyed spent between one and five months before filing the legal paperwork. And 14 percent of new businesses owners persevered for more than three years before filing.
Of the more than 1,400 business owners surveyed, 70 percent were "solopreneurs," forming companies with no other employees. A quarter had between one and four employees, the report found.
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The top industries in which respondents started businesses were:
- Miscellaneous service businesses -- those other than personal, business, home and financial-related services
- Internet companies, either ecommerce or a website
- Real estate
- Business services
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