- Government officials have said a recession in the US is “pretty likely” in the near future.
- But it’s still a good time to launch a business, experts told Insider.
- Here’s why aspiring entrepreneurs should consider starting up right now.
Despite the news of major technology companies beginning hiring freezes, consumer prices rising, and government officials saying a
in the US is “pretty likely” in the near future, it’s still one of the best times to start a business.
Technologies like freelance marketplaces, website-building platforms, and social media make entrepreneurship more accessible and inexpensive, said Dave Mawhinney, an entrepreneurship professor and executive director at Carnegie Mellon University. What’s more, these factors also make it a good time to be a solopreneur, he added.
“When starting a business, your capital needs are as low as they’re ever going to be,” he said. “If you can bootstrap it yourself, you can do that at any time, in any economy, under any situation.”
Despite the pandemic and the economic uncertainty it created, 9.8 million new business applications were filed between 2020 and 2021, according to US Census Bureau data. In April, more than 400,000 new business applications were filed, a 1.6% increase from the previous month
Mawhinney, an economist, and business coach each shared their predictions for the coming years and why they encourage aspiring business owners to jump on the entrepreneurial bandwagon now.
It’s not as bad as it looks
Economic slowdowns can give people pause, but the economy is still in a very strong place, said Luke Pardue, an economist at the HR platform Gusto.
“We don’t really see that hesitancy to spend that might predate a future recession,” he said of the consumer market.
Another hopeful characteristic is the changing relationship between the economy and entrepreneurship, Pardue said.
“Previously, entrepreneurship fell during recessions because people became a lot more risk-averse,” he added. “But what we’re seeing now is they’ve realized that employment itself is risky, and it’s become easier to start that business.”
In fact, the businesses launched during the pandemic have been a big factor in the overall success of the economy, and they’ll continue to be in the future, he explained.
Solopreneurship is low-cost and low-risk
With venture-capital investments dipping, service-based businesses can be low-cost alternatives to starting a product or tech company that may need venture backing, Mawhinney said. Business ventures without additional employees, office space, or anything more than a computer and WiFi are easy to start with little overhead, he added.
Additionally, the need for solo-run professional services (virtual administration or consulting) and personal services (ridesharing and grocery delivery) have each increased over that last two years, Pardue said.
COVID-19 created new opportunities out of necessity
Over the past two years, professionals in many industries have embraced remote work. Aubree Malick launched a virtual-assistant business in 2018, and during the pandemic, she saw employers’ need for project-based and virtual workers. She took the opportunity to launch a virtual-coaching business that taught other aspiring freelancers how to sell their services.
“A lot of companies are the benefits of hiring a freelancer on a month-to-month retainer,” compared to paying an employee a full-time salary with benefits, she said.
She encourages her coaching clients, who are aspiring entrepreneurs and freelancers, to take advantage of the new opportunities. “Remote work is starting to become the norm,” she said.
New technology allows us to capitalize on our skills
In order to maintain low startup costs, Mawhinney suggests capitalizing on skills you already have, like financial literacy, copywriting, or administrative work.
What’s more, it’s never been easier to build your network of customers, he said. For example, marketplaces like Upwork and Guru allow business owners to connect with potential clients, he added.
Malick said that sharing social-media content is another way to widen your audience.
“Paid advertising is not the top dog anymore,” she said, referring to algorithm changes that prioritize video and reels. “It’s not about how much money you have to throw at advertising. It’s about who provides value and does so on a consistent basis.”
Industries like technology and professional services are here to stay
As the economy and workplace keep changing, it’s important to stay on top of the latest trends, technologies, and tools, Mawhinney said. He added that it’s also necessary to continue differentiating yourself in those spaces.
“You have to create a skill set where you’re amongst the best at it — be irreplaceable,” he said.
Marketing, computer engineering, coding, social media and video production, business coaching, and financial consulting are some of the most sustainable solopreneurship ventures today, the experts said.
“If you have a skill set, you have to be a couple of steps ahead of somebody who wants to get to where you are,” added Malick, who says that online courses, one-to-one coaching, digital products, or even something simple like a grocery shopping can be turned into a business.