Lending rates are extraordinarily low, yet fewer people are starting businesses. What’s going on?
Market volatility and uncertainty is making many people wary of starting new businesses, especially as the 2020 elections loom forth. With many waiting in the sidelines for political and economic situations to be resolved (or at least reduce their turmoil), it could be an extraordinary opportunity for the right business.
So, is this really a good year to start that new business you’ve been thinking about? Let’s take a look.
Why 2020 is a Great Time to Build and Expand
All economic signs are positive right now. The United States has been in a prolonged state of growth. Unemployment is low. And the current administration is extremely business-positive. While the elections may bring with them some negative change, it’s unlikely that there will be an extreme reversal of fortune.
Thus, most analysts say that now is a great time to grow or expand a business. But business owners are skeptical and hesitant, largely because many have been anticipating an economic crash for some time. With major volatility in the markets and consumer debt rising, it remains to be seen which types of business are going to succeed.
Creating a Business That’s Recession Proof
Although this may sound like a “pie in the sky” dream, there are many businesses that are known to be fairly recession proof. Starting a bar in an area that isn’t over-served by bars, is one example. Liquor sales tend to go up with recession, because it’s an affordable form of recreation.
Other small business opportunities are eCommerce-oriented, because of the unnaturally low overhead of digital businesses. If an individual can start a business with nearly no capital, it’s a good business idea — it has opportunities without much risk for failure.
Other areas include the following:
- Skilled trades: For a time, fewer people were going into skilled trades. And that means skilled tradesmen have been making bank. Starting a trade company in construction, concrete cutting, carpentry, steel working, electrical work, and other similar trades is an excellent bet, because someone will always need your service.
- Software development: Web and app development remains one of the fastest growing fields, and starting a web and app development company really requires knowledge more than anything else.
- Subscription boxes: Believe it or not, the subscription box industry hasn’t gotten over-inflated yet. People are wanting experiences more than things, and they want those experiences delivered to them. Today, there are subscription boxes for everything from household products like air filters to pet treats—because people are enamored with the idea of convenience.
- Self-storage units: Have you seen commercials for self-storage franchises? They’re not trying to rope you into an unsuccessful enterprise. Self-storage units are increasing in value because people are down-sizing. As people continue to down-size, they’ll need additional storage space. Businesses need storage space. And people just trying to clear out their homes.
- Food trucks: The food truck trend hasn’t died out. In fact, it’s become a spectacular way for people to test the market before they invest in a restaurant. But make sure that your food is good, or that you have a very specific niche. When it comes to food trucks, you want to do one thing, and you want to do it well.
There are many opportunities for business owners, especially small business owners. But there’s one thing to note: While there may be a “good time” to open a business and a “bad time,” within the spectrum of one’s life, the best time to open a business is usually as soon as possible.
Most entrepreneurs will fail at multiple businesses before they find the one that succeeds, but businesses themselves produce their own value, in terms of networking and experience. Even a failed business is a potential stepping stone towards a successful business, and (as many business owners will learn), money can still be made from a failed business even if the business itself isn’t sustainable.
Economic outlook is good. Whatever the rest of 2020 brings, it’s likely that there will be many winners in the small business market.