Did someone cut the strings to your golden parachute? It’s happening to a lot of Americans, with the unemployment rate soaring to 8.1%, the highest in 25 years. So what do you do when you no longer have a golden parachute?
Well, you can join the ranks of those going into “forced entrepreneurship.” That’s what Mark V. Cannice, executive director of the entrepreneurship program at the University of San Francisco, calls the flood of people starting new businesses after being laid off.
Recessions are good times to start small businesses, and traditionally the number of small businesses has grown in these times. Examples include the recessions that spanned 1990-1992 and 2001-2003 (according to the Small Business Association).
7 Reasons to Start a Small Business Now
But unlike in previous recessions, people are finding more reasons than ever to start a small business now. Here are 7 of those reasons.
1. Zero and Low-Cost Marketing
The internet has made it possible for just about anyone to market their small business for little or no cost. The more you know about online marketing, the less it costs.
2. Business Investors and Partners
The internet also makes it easier than ever to hook up with strategic partners and investors around the globe. You no longer have to fly to a foreign country to have a foreign partner.
3. Microlending Explosion
Thanks to the likes of Grameen Bank the concept of microlending has taken off. Now you can easily qualify for very small loans ($500-$35,000) with the help of the Small Business Administration.
4. No Stigma
While corporate employers used to view entrepreneurs with some disdain, these days large employers take a more positive view of startup activity. Having seen the positive and Darwinian-like effects of skunkworks and spin-offs, entrepreneurial activity is now seen as a positive factor in a resume.
5. Low Overhead Businesses
Many ex-employees are launching micro-businesses rather than small businesses. They are aiming to serve individuals and other small businesses instead of launching the next Google. When you’re developing a tiny business, the overhead is much lower.
6. Home Business Explosion
Home businesses, network marketing, MLM, and direct selling are all becoming far more acceptable to ex-employees. While these people may have been “snobs” about these businesses in the past, the extremely low overhead (average $200 a month) and the abundance of professionally-run home businesses encourages many to reconsider these opportunities.
7. Turn the Economy Around
The Bureau of Labor Statistics confirms that small businesses are some of the largest employers in the economy. Last year, according to the Bureau, 3.8 million companies were small companies with fewer than 10 workers, and they employed 12.4 million people, which is about 11 percent of the private sector work force.