Are you thinking about starting a small business? Prior to the 1980s, starting a business was the epitome of the American Dream. It was a way for Americans, particularly the less-educated and immigrants, to rise to the middle class and hopefully beyond. But lately, it’s a dream that fewer people are chasing.
Just prior to 1980, business upstarts (those businesses less than a year old) represented about 15% of the total number of businesses in the United States. Today, the number of upstarts hovers at about 8%. Experts cite the following as probable reasons for this decline:
- Big corporations that either absorb or drive out small businesses
- Fewer people at the right age for starting a business (as compared to the baby-boom generation)
- Limited access to start-up capital because of fewer community banks and increased difficulty in obtaining a home-equity loan
- Increased regulations that may hinder small businesses in some industries
The US economy has suffered the effects of this slowdown in small business startups. New businesses, especially in the technology sector, often drive innovation and productivity. Entrepreneurs have new ideas and offer a fresh perspective that large, well-established companies sometimes lack; they have a tendency to get stuck in their old ways of doing things. Also, it is often costly for a larger business to drastically change the way they operate. When overall productivity declines, the economy stagnates, which is what we have seen in the past ten years.
Our economy is in desperate need of new business start-ups and the innovation they provide. So, if you are thinking about starting a business and can overcome the obstacles listed above, now is a good time to move beyond the thinking stage.
To help you get started, Entrepreneur.com has provided a Complete Guide to Starting a Small Business. Here is the quick rundown:
- Evaluate Yourself – What skills, expertise, or passion do you have that can be turned into a business?
- Think of a Business Idea – Can you use your skills to fix a problem in or make an improvement to an existing business sector?
- Do Market Research – Find out who your competitors will be and consider possible partnerships.
- Get Feedback – Tell people about your ideas or share examples of your product with others and ask for their opinion.
- Make it Official – Find out what legal requirements there are for your business and take care of them.
- Write Your Business Plan – Doing this will help you organize your ideas and can also help you obtain venture capital.
- Finance Your Business – As mentioned above, access to capital by way of traditional means is limited, so you may need to get creative on this step.
- Develop Your Product or Business – Even after you start your business, don’t get stuck in a rut; continue to improve upon your product or service.
- Start Building Your Team – You may have a great idea, product, or service, but you can’t do everything yourself; find quality people to fill the gaps that your strengths don’t cover.
- Find a Location – Think about what factors are important to consider for your type of business.
- Start Getting Some Sales – Figure out who is most likely to benefit from your product or service and approach them in a variety of ways.
- Grow Your Business – Market your business to a larger audience through advertising, and make sure you have a website where potential clients or customers can learn more about your business.
The new year will be here before you know it. So what are you waiting for? What unique skills, talents, or perspectives do you have to offer your local community and beyond? Can you start your business as a side hobby while keeping your full-time job? Stop thinking about it and do it! Our local and national economies need you.
