The current economic environment, characterized by a significant increase in business license applications and plentiful sources of lending and equity capital, is considered an excellent time to start a new business. A few factors enhancing this prospect include a safety net of employment opportunities if the business fails, the ability to work from anywhere reducing geographical constraints on hiring, sinking costs including overheads and technology, availability of virtual support services, and the value of experience even if a venture fails. However, the challenge for those starting a new business lies in creating a nimble, innovative niche business that can sustain profitability amidst potential obstacles like inflation, employee shortages, supply chain disruptions, geopolitical tensions, and the possibility of another pandemic.
The Current Economic Environment
The current economic environment has been deemed to be an excellent time to start a new business. Statistics show that business license applications in 2021 were more than 50% higher than in 2019. In addition, there are plentiful sources of lending and equity capital for businesses that were absent prior to the pandemic.
Factors Enhancing New Businesses
- A safety net – this means that if the venture fails (which is likely statistically) there are numerous opportunities for employment, especially for college-educated talent
- Work-from-anywhere – this means that hiring good talent is not geographically-limited
- Costs are sinking – many workers don’t expect companies to provide office space, which means that upfront overhead costs are lower than in the past. In addition, technology costs continue to decline as platforms become more robust
- Virtual help – almost all support services are available online, including HR, payroll, supplies, etc.
- Win by losing – in the event your venture fails, prospective employers frequently value the experience gained by the process
- All paradigms are shifting – the pace of reinventing businesses has accelerated due to the pandemic and technology and new ways to build market share are changing almost daily
It is likely that these factors will continue in the months and years ahead. One challenge that remains for budding business owners is to develop a nimble, innovative niche business that can become and remain profitable despite inflation, employee shortages, supply chain issues, war between Russia and Ukraine, and the ever-present specter of another pandemic.
Question & Answer
Q: Why is the current economic environment considered an excellent time to start a new business?
A: The current economic environment is characterized by a significant increase in business license applications and plentiful sources of lending and equity capital, making it an opportune time to start a new business.
Q: What are some factors enhancing the prospect of starting a new business?
A: Factors enhancing the prospect of starting a new business include a safety net of employment opportunities if the business fails, the ability to work from anywhere reducing geographical constraints on hiring, sinking costs including overheads and technology, availability of virtual support services, and the value of experience gained even if a venture fails.
Q: What challenges do those starting a new business face?
A: The challenge for those starting a new business lies in creating a nimble, innovative niche business that can sustain profitability amidst potential obstacles like inflation, employee shortages, supply chain disruptions, geopolitical tensions, and the possibility of another pandemic.
