- Administration officials have said there is a “very likely” that the U.S. will slip into a recession in the near future.
- But experts tell Insider it’s still a good time to start a business.
- This is why aspiring entrepreneurs should consider starting a business now.
Dave Mawhinney, a professor of entrepreneurship and executive director at Carnegie Mellon University, said technologies such as free markets, website building platforms and social media have made entrepreneurship more accessible and less expensive. More importantly, these factors also make it a good time to be a solo entrepreneur, he added.
“When starting a business, your capital needs are lower than ever,” he said. “If you can steer it yourself, you can do it at any time, in any economy, in any situation.”
According to statistics, 9.8 million new business applications were filed between 2020 and 2021 despite the pandemic and the economic uncertainty it caused. US Census Bureau data. In April, the number of new business applications exceeded 400,000, a month-on-month increase of 1.6%
Economist and business coach Mawhinney each share their predictions for the next few years and why they are encouraging aspiring business owners to jump on the entrepreneurial bandwagon now.
it’s not as bad as it looks
Luke Pardue, an economist at human resources platform Gusto, said a slowdown might give people pause, but the economy was still very strong.
“We don’t really see a hesitation in spending that could be ahead of a future recession,” he said of the consumer market.
Another promising feature, Pardue said, is the changing relationship between the economy and entrepreneurship.
“Previously, entrepreneurship declined during recessions because people became more risk-averse,” he added. “But what we’re seeing now is they’ve realised that jobs are inherently risky and it’s become easier to run this business.”
In fact, businesses launched during the pandemic have been and will continue to be an important factor in the overall success of the economy, he explained.
Low personal start-up cost and low risk
As venture capital declines, a service-based enterprise can be a low-cost alternative to starting a product or technology company that may need risk support, Mawhinney said. Businesses without extra staff, office space or anything other than computers and WiFi can easily start with little overhead, he added.
In addition, Pardue said that over the past two years, there has been an increase in demand for both professional services (virtual management or consulting) that operate independently and personal services (ride-sharing and grocery delivery).
COVID-19 creates new opportunities out of necessity
Over the past two years, professionals in many industries have embraced remote work. Aubree Malick, who launched a virtual assistant business in 2018, saw demand from employers for project-based virtual workers during the pandemic. She took the opportunity to launch a virtual coaching business, teaching other aspiring freelancers how to sell their services.
“A lot of companies recognize the benefits of hiring freelancers on a monthly basis” rather than paying employees full-time wages with benefits, she said.
She encourages aspiring entrepreneurs and freelance coaching clients to take advantage of new opportunities. “Remote work is starting to become the norm,” she said.
New technologies allow us to leverage our skills
What’s more, building a customer network has never been easier, he said. For example, marketplaces like Upwork and Guru allow business owners to connect with potential customers, he added.
Sharing social media content is another way to expand your audience, Malik said.
“Paid advertising is no longer the most important thing,” she said, referring to algorithm changes Prioritize video and reels. “It’s not about how much money you have to spend on advertising. It’s about who provides value and does so consistently.”
Industries such as technology and professional services are here to stay
As the economy and workplace continue to change, it’s important to stay on top of the latest trends, technologies and tools, Mawhinney said. Continuing to differentiate itself in these areas is also necessary, he added.
“You have to create a set of skills that you are best at — irreplaceable,” he said.
Marketing, computer engineering, coding, social media and video production, business coaching and financial consulting are some of the most sustainable self-employed businesses today, experts say.
“If you have a set of skills, you have to be a few steps ahead of someone who wants to get to where you are,” Malik added, saying online classes, one-on-one coaching, digital products, and even things as simple as grocery shopping Can be turned into a business.