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5 Reasons Why Now Is the Best Time to Start a New Business

By Michael Lewis

start business yes noThe combination of inexpensive technology, accessible virtual markets, and easy funding through crowdsourcing is changing the face of entrepreneurship. Today’s new business starters are socially sophisticated, willing to bear more risk than previous generations, and more likely to work out of a home or small office and rely on others for business processes. Some are small guerrilla outfits surfing from one hot concept to the next, and some are venture capital-funded geniuses with disruptor ideas.

It is a great time to start a new business – the best time in history.

The Keys to Success

America has always been the land of opportunity, the Mecca for entrepreneurship. While great fortunes have been made by immigrants and first-generation Americans such as Andrew Carnegie in steel, John D. Rockefeller in oil, and William A. Clark in copper, thousands of others formed successful small companies that provided financial security and employment for hundreds of thousands of their fellow citizens.

The possibility of being responsible for one’s own fate has never been greater in the history of the country. Latent opportunities for new ideas and businesses have exploded exponentially, each new concept and novel interpretation of old methods pregnant with possibility, just waiting to be birthed. There are several key reasons why this is so.

1. Cultural Accommodation

For much of history, capitalism was restricted to the beneficiaries of high birth, ancestral wealth, and exclusive education. The wide-open spaces and untapped resources of the new continent in the 19th century shattered cultural norms that had existed for hundreds of years. Entrepreneurs flooded the country, exploiting new resources, new markets, and new technology to create the greatest industrial nation in the history of the world.

Despite the success, access to these new possibilities was unfortunately generally limited to white males. Minorities (except in their limited communities) and women were excluded, restricted by racial prejudice, cultural stereotypes, and inefficient educations.

America in the 21st century is a more open society and access continues to broaden regardless of sex or ethnicity – anyone smart enough and brave enough to create a new business can try. According to a 2013 American Express report, there are 8.6 million women-owned businesses in the country, generating more than $1.3 trillion in revenues and providing jobs for 7.8 million employees. The rate of growth between 1997 and 2013 in new women-owned businesses has been one and a half times the national average. In a U.S. Census News release in 2011, Tom Mesenbourg, deputy director of the U.S. Census Bureau, proclaimed, “The growth in the number of minority-owned firms – both employers and non-employers – has far outpaced that of businesses overall.”

Led by federal and state governments, programs to assist potential new business owners are readily accessible and generally free. An entrepreneur can access classes ranging from basic accounting, to sophisticated product and service contracting. Face-to-face onsite mentoring is available from organizations such as S.C.O.R.E., while municipalities, colleges and universities, and private businesses offer incubator facilities with administrative and accounting assistance at low cost. Federal laws require that a percentage of federal contracts be subcontracted to small businesses and provide detailed contracting assistance for those individuals and companies who seek such work.

2. Open Markets

The overwhelming ubiquity of the Internet has opened worldwide markets for companies of all sizes. A one-person operation with a website and a presence on social media can reach consumers across the world as easily as the neighbors down the street. People in all countries are exposed to the same news and cultural phenomena, so a popular product or service can easily go viral across borders. Traditional distribution channels are under pressure to expand and eliminate barriers of cost or exclusivity that once existed. In short, an entrepreneur today can sell anything to anybody any place on the globe.

While mass markets are more available, the ability to use demographic and social media data to identify small, specific, specialized markets has never been greater – or easier. A specialty dog food company can target dog owners by breed and age, a design artist can market to self-publishing e-book authors, and a garage rock band or a fledgling movie maker can create a worldwide presence via sites like YouTube. A mobile phone app such as Candy Crush becomes an overnight sensation and is the impetus for a public stock offering. Whether the entrepreneur’s aim is the local community or buyers across the oceans, the opportunity is there.

start business computer cash

3. Inexpensive Technology

As the Internet has spawned open markets, technological advances have driven down costs, improved quality, and increased access to those who are less mechanically or production-inclined. Few businesses today produce 100% of their products or services with company-owned equipment, facilities, or employees.

Scores of specialty manufacturers are available, whether on the next block or half a world away. Robotic machines can cut, mill, weld, shape, and paint materials of every sort to the most demanding specifications. Third-party logistics companies can source, store, and deliver products of all sizes, fragility, and duration at low cost in local and remote facilities. Even more personal and intimate aspects of business, such as customer service and technical support, can be provided transparently and multilingually from foreign lands.

Software translators can interpret and simplify the most complicated computer language, expanding its utility and providing extraordinary computational power to the most technology-averse users. Printed materials can be provided remotely, on-demand by customer-owned printers; art and photographs can be manipulated easily by sophisticated programs available for free over the Internet; and one-of-a-kind physical prototypes to complete parts and models can be created from multiple materials by 3D printers.

Technology has changed the face of employment across the world, introducing telecommuting, job-sharing, and video conferencing to the old world of centralization, standardization, and limitation. Entrepreneurs selling their services and talents, whether business consultants, administrative specialists, artists, or writers, can efficiently serve clients and customers as easily as before with much less expense.

4. Accessible Funding

Historically, a person with an idea for a new business, but no money, had to go hat-in-hand to those with capital, begging and pleading for an investment. The process, including presentations, exhaustive explanations, and multiple projections, more often than not failed to achieve the sought-after funding. To their chagrin, entrepreneurs learned quickly about the financial golden rule: “He who has the gold makes the rules.”

Those seeking capital were required to deal with arcane, even nonsensical, rules about who could be solicited, the amount of funds that could be invested, and how the money could be used. It was an expensive and time-consuming system that served neither entrepreneur nor investor. As a consequence of extensive and expensive regulations, many entrepreneurs simply gave up or fell prey to unscrupulous promoters and con artists who flourished as a result of the inefficient enforcement of complicated laws.

However, today a person starting a new business has access to individual investors (sometimes called “angels”), venture capital funds created for the sole purpose of investing in new ideas and new companies, public and private offerings to groups of investors, and government-subsidized debt through the Federal Government’s Small Business Administration programs. Though investors still have to prove the merit of their ideas, their options for funding are greater and the process, generally, is less convoluted.

Several sources of funds include:

  • Large Corporations. Corporations are often willing to fund and even encourage start-up companies to provide services and products to the bigger companies and discover and develop niche markets outside those larger companies’ area of interest.
  • Private Banks. Banks are ready to assist new business owners with capital asset purchases, accounts receivable, and inventory short-term loans, joining traditional finance companies and factors.
  • Franchisors of Proven Business Concepts. Franchisors frequently provide favorable funding to encourage new franchisees and existing small business owners (seeking to sell their business and retire), to accept long-term payment arrangements in lieu of cash, thereby allowing the new owners to pay for the company out of operations.

Relaxed government regulation has generated a new industry dedicated to start-up funding with at least two different approaches. A donation-based model is attractive to investors who share common social goals or seek products, perks, or rewards in return for investment. For example, a band or an author might provide royalties in return for investment, or a restaurateur might discount meals or provide special seating. In investment-based models, on the other hand, ownership stakes or debt are sold online so those who invest become shareholders in the funded enterprise.

According to the 2013 Crowdfunding Industry Report by Massolution, crowdfunding platforms raised $2.7 billion in 2012 – and that number was expected to almost double in 2013 to $5.1 billion. A few notable websites for entrepreneurs seeking funding include the following:

  • Kickstarter. One of the earliest platforms, Kickstarter, focuses on donation-based funding for creative entrepreneurs such as authors, artists, musicians, and filmmakers.
  • Crowdfunder. Crowdfunder is the leading site for businesses whose fundraising is localized to cities and regions across the United States and Mexico. It provides donation- and investment-based approaches.
  • Somolend. Somolend focuses on debt-based investment funding to small businesses, providing a vehicle for entrepreneurs to attract friends and family, as well as local banks to partner with the site.

In addition to the possibility of using “OPM” – i.e., “other people’s money” – to fund a new company, individuals are often in the position to capitalize their own operations by using employer savings and investment accounts to which they have contributed for years, as well as severance payments and personal investments made during earlier employment. Of course, if the business idea or the proposed management – you – cannot justify an investment, starting a company is not a good idea.

start business sprout

5. Relaxed and Beneficial Regulations

In 2012, the Jumpstart Our Business Startups Act (JOBS) was passed, greatly expanding the sources of capital available to prospective and existing small business owners. The law eased federal registration requirements for small businesses with assets under $10 million and 500 or fewer shareholders. It also expanded the potential universe of investors to include those earning less than $100,000 annually (with a limit on the amount which such potential shareholders could invest), and allowed broader public marketing efforts than had previously been in place. As a consequence, the potential investment pool for start-up companies was dramatically expanded.

Although tax laws are in constant flux, Congress has shown a willingness to accommodate and encourage small business ownership. Use of the home office deduction was simplified with an alternative deduction method. Also, increased limits for contributions and benefits of qualified retirement plans, and increased credits for employee health insurance are among the 2014 regulations. Plus, the likelihood is high that favorable regulations on accelerated depreciation and the multiple-business credit which expired in 2013 will be extended before 2014 taxes are due.

Business owners with fewer than 50 employees are exempt from provisions in the Affordable Care Act of 2010 requiring certain companies to provide employees with health insurance. However, the recently created health insurance exchanges are likely to provide small businesses with better health insurance options and with better coverage at lower costs. It should be noted that the law is very controversial and is likely to be significantly amended in the coming years.

Final Word

In the words of William Durant, a high school dropout who founded General Motors, “Forget past mistakes. Forget failures. Forget everything except what you are going to do now and do it.” The American Dream has always been to own one’s business, to reap the rewards of your effort and intelligence without penalty. If you have an idea or a desire to be a business owner, today is the best day to begin the process.

Are you thinking about starting a new business?

Michael Lewis
Michael R. Lewis is a retired corporate executive and entrepreneur. During his 40+ year career, Lewis created and sold ten different companies ranging from oil exploration to healthcare software. He has also been a Registered Investment Adviser with the SEC, a Principal of one of the larger management consulting firms in the country, and a Senior Vice President of the largest not-for-profit health insurer in the United States. Mike's articles on personal investments, business management, and the economy are available on several online publications. He's a father and grandfather, who also writes non-fiction and biographical pieces about growing up in the plains of West Texas - including The Storm.

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  • http://www.site-buildit.com/ Steve M Nash

    I used to be a freelance IT contractor (computer analyst/programmer), back at the end of the 20th century, so the idea that my job was not secure was something I came to understand. So much so that I also started to think that even so-called permies (people with a permanent contract, and thus long-time future with the company) were really kidding themselves if they actually thought there job was full-time (with that particularly company, anyway).

    So I guess that’s why it was “easy” for me to give up working for anybody but myself. So I quit the freelance scene in 2000 and started trying to earn money from web design and, once I discovered I wasn’t much of a web designer, from my own websites (aka affiliate marketing, and – once it was invented – Google Adsense, etc.).

    So I can heartily recommend starting your own business, whether it’s a strictly online venture (infopublishing, say) or a mixture of online and offline (no business these days can afford to not take advantage of online marketing, imho), if for nothing else than an insurance policy against losing your main job.

    Also, the discipline needed when you start your own business is bound to help you in your *real* job, too, not least in becoming much more disciplined in how you spend your time.

    Thanks for the post
    Steve

  • david

    Steve

    All very relevant insight–sounds like you’re definitely the voice of experience.

    Thanks for weighing in…

    I especially liked the comment about making you more disciplined in how you spend your time.

    By juggling a day job and two side businesses, I am probably the time management king at the moment!

    • http://www.site-buildit.com/ Steve M Nash

      Hi David

      Glad my comments were useful. Actually, I used to have a day job and work on my websites in the mornings/evenings. But when I went full-time I don’t think I ended up doing any more work in that extra time – I just filled it with the same stuff.

      So as much as doing a day job and two side businesses is great time-management (and, boy, that *is* impressive!), the real test is what happens to your time when you no longer have the structure (and discipline) of the day job!

      Steve

      PS Time management is key, but I think the #1 thing to look for as you start this home business, if possible, is a mentor – a mentor you can trust. I’ve suffered by not looking for/finding one over the years…

      • david

        Steve

        You words ring very true with me!It will be a true test if I can maintain the time management thing after I quit my day job.

        A few people I know that work for themselves do have some issues. The most important being that their friends just seem to think that they don’t work AT ALL anymore because they don’t go to a 9-5 job.

        And great stuff about the mentor. I acutally have 2-3 that I have been drawing on every step of the way. I am about to have some serious discussions with them as to when to pull the tirgger on my day job.

        Thanks so much for commenting.

  • http://www.maketodaypayday.co.uk Kate

    Great article. I have been trying to figure out a way to get a second job so I have a little extra flow of cash, but haven’t tried because of the things you stated. I will have to regroup and figure something else out! Thanks for providing some motivation.

    • david

      Kate

      The first thing I’d do is find what you’re passionate about or talented at. Everyone has talents and passions.

      I’ll give you my example. I have always been passionate about writing (I was a Creative Writing Major in school). But I could never find the right “real” job in order to utilize it.

      Well, a few years ago, I realized I had a knack for all things “financial”, so I decided to combine the two. I wrote a book on the subject that was published, and started my own blog.

      Six months later, I find myself here. I have good revenues from both avenues and I am looking to expand them both to someday quit my day job.

      Best of luck to you!

  • http://www.castocreationsjewelry.blogspot.com megscole64

    Awesome article. I figure…if I can be successful in these crazy times then I will be successful when the economy comes back. At least that’s my hope. :) I’ve only been my own boss for a few months but I really love it and can’t imagine going back to a 9-5 job.

    • david

      Meg

      I know you can be successful. Its a simple formula, you just need to stick to it. Too many people give up too early.

      And I am so envious of you about not having the 9-5 job, you don’t even know.

      I wish you all the luck in the world.

  • Melvin

    Is it possible, normal, and legal to have a LLC and a normal job at the same time?

    • Magnus

      I did it for 5 years. Never had any issue besides need to work 24×7 :)

      • Michael Lewis

        I agree, Magnus, it can beard work. But, as my Daddy used to say when we worked on our farm, “Ain’t this fun!”

  • David Bakke

    Melvin

    I’ve never heard anyone say that you can’t!

    Thanks for commenting…

  • Pingback: 5 People Who Turned Career Disaster Into Success

  • Lisa

    I am currently unemployed. I just obtained my Paralegal degree and suddenly finding myself not wanting to pursue a career in this field. My dream is to own my own business but I havent been able to pinpoint my passion.

    • Davidbakke

      Lisa

      Finding your passion can be difficult. Have you asked your family and friends what they thin you’d be good at? You might be surprised at what they tell you.

      Thanks for commenting

  • Celestine Landrum

    celestine
    How about “avon” selling avon products, would this be considered a good home based business?

    • Davidbakke

      Celestine

      If you think you’d like it, and feel you can make money by doing it, then by all means, go for it!

      Thanks for commenting

  • Angela

    How about becoming a Amway distributor? what is your thoughts about this program?

    • David Bakke

      Angela,

      Honestly, I don’t know much about it. I’d advise to do your research and go into it with your eyes wide open…

      Hope that helps, and thanks for commenting.

    • Joan

      Angela,

      Nutritional Products? I strongly recommend go with USANA health sciences. Amyway don’t stand a chance when the two products are being compared.

  • rash

    well it has alot of useful information for businessman or the people who want to start a businessand to students to for their tasks……… :)

  • Snoopgirl_101

    i have just finished schooling with my Associates Degree in Applied Science of Accounting and i am still looking for a job right now i am a stay at home mom and i am looking for some extra income does anyone have any good ideas that would work out. thanks

    • Davidbakke

      You could offer to do some accounting work for friends and family. Another idea is to sell your unused items on the Internet, such as small electronics and college textbooks. And although you won’t break the bank, filling out paid surveys online will bring in modest income. Hope that helps and thanks for joining the conversation!

  • Bill

    Hey, Listen. if you really really serious about being your own boss and starting your own business to generate $$$$?

    look me up on facebook: (Bill Zhao) add me and I will tell you more.

  • http://www.facebook.com/dave.angela.98 Dave Angela

    Hello everyone, I am Mr.Dave, a private loan
    lender offering life time opportunity loans to pay
    bills and debts to private companies Or individuals
    at a low interest rate of 2% . We give out loans
    from 5,000 to 10,000,000 with a year
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  • Deepu

    Hi guys, I have a laptop with nice Internet connection … Nothing more than that can any one suggest me a job.
    I’m studying, & I belong to a country where poverty & unemployment is a common thing “India”.
    If anyone have any good idea please suggest me thanks.

  • Suzannah

    Okay well I love interior design, designing rooms etc in my head and on paper (I can’t draw very well though) and I have no interior design degrees, just my ideas. I want to have my own business but I don’t know how, or what I can do to start it. I’m best at saying about colours, feature walls, furniture.. I also love being on the computer, typing and giving people ideas.

  • Mike

    Anybody know the best (and easiest) way to start a website? I just want to know who I can trust…

  • http://www.schultz-cpa.com/ Jeffrey Schultz

    The other thing that would make it a good time to start a business is if you were still in your early 30′s. Believe me. I had a lot more energy 10 years ago.

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