In early 2019, a company called Meta was unable to continue funding research into creating an augmented reality product. Therefore, it was unable to continue operations despite once being valued at close to $250 million. If such a large company can fail, Nevada startup owners should understand that theirs could too regardless of how large it gets. It is also important to know that selling a startup can cause a wide range of emotions.
Mergers and acquisitions can be powerful strategic tools for Nevada businesses looking to access a larger market share. Therefore, it should come as no surprise that many U.S. corporations bought up companies over the past year, setting one of the highest records for mergers and acquisitions during 2018.
Business owners of Nevada might be surprised to learn that even though family-owned businesses are responsible for hiring about 60 percent of the American working population, about 70 percent of these same businesses don't make it past a single generation. Consequently, family-owned businesses are very wary when it comes to succession planning, especially if their owners are anxious about the business lasting for more than a generation in the family.
For a startup to be successful in Nevada or any other market, it needs to have a product that meets the needs of its target customer. It will also need to survive in the face of possible legal or regulatory changes. Ideally, a company will begin by first examining the current economic landscape to determine if its product could be better than what the competition has to offer.
A business succession plan can be the key to maintaining company profits and growth after the original owner steps down. The issue for many Nevada ventures, though, is that their owners fail to prepare for the next generation. It can be emotionally difficult to take the time to put together a succession plan because it requires an admission that the owner will retire, die, or become incapacitated at some point. No matter how qualified or accomplished the children, the parents may have questions about their ability to take over.
Many entrepreneurs in Nevada use federal Small Business Administration loans to get their businesses running. There are few limitations on what type of businesses are eligible to qualify for SBA loans. However, it is important for borrowers to understand how this type of loan works when they apply.
Las Vegas companies may have high hopes for the profitability of their enterprises after a merger or an acquisition. However, from 70 to 80 percent of all such projects fail to live up to the anticipated value expected during the process. In most cases, this is not because the acquired firm was overvalued or unexpectedly weak. A poor strategy to integrate a new acquisition can cause businesses to lose out on profits and reaping the full benefits of their mergers. By introducing delays along the way, an unprepared business can sap the momentum spurred on by the acquisition. In order to achieve a successful transaction, advance strategic planning can be essential.
Anybody who wants to start a business in Nevada or anywhere else will need to have a plan. Even if you don't create a formal or traditional business plan, it is essential to understand what the company has been established to do. It is also important to know how the company's goals will be achieved and what happens if those goals change for any reason.
Nevada entrepreneurs should be wary of larger companies trying to squeeze them out of the marketplace. It is not uncommon for large businesses to have a fear of disruption. Therefore, they may attempt to incorporate changes before their smaller competitors can cause such disruption to happen. However, smaller businesses can win by offering better customer service and targeting niches that mature organizations may not effective in reaching.
Nevada entrepreneurs who are looking to raise money for their companies may want to consider using convertible notes. Essentially, the note is a debt instrument that converts into an equity share of a company as more money is raised. For business owners, it is a simpler way to raise money because there is less of a need to put a strict valuation on the company. It may also be beneficial from a tax perspective.