Why You Should Start a Business Now, Even in This Economy
You have probably given more than a passing thought to being your own boss, maybe even pursuing an entrepreneurial idea you’ve nurtured for a long time. Well, as the economy sputters to life again—with more resources, funding options and government incentives as well as pent-up consumer demand and an eager workforce—there’s never been a better time.
You might have personal motivations for launching that dream. Perhaps you’re like Jenny Fulton and Ashlee Furr, who found themselves burned out and laid off from the financial industry. They took a leap of faith and started a business with a pickle recipe from Jenny’s grandmother and some homegrown cukes. By 2013, jars of Miss Jenny’s Pickles sold in 800-plus U.S. stores and dozens in China (the business was eventually closed in 2017).
“I must be honest,” said Fulton, of Kernersville, North Carolina, in an appearance before a congressional small-business subcommittee in February 2013, “I was extremely amazed, humbled and proud to be standing next to our pickles on the shelf in China.”
Maybe you’re in a corporate job but think your opportunities are limited no matter how hard you work. You wish you could chart your own course. Such was the case with Omar Soliman, whose entrepreneurial idea came as a college student spending summers hauling away other people’s junk. Soliman graduated college, went the corporate route upon the advice of his dad, and hated it. Now College Hunks Hauling Junk, which he co-founded in 2005, has spawned a spinoff moving business and franchises in more than two dozen states.
Marsha Firestone, Ph.D., founder of the Women Presidents’ Organization, believes all employees working their way up the corporate ladder should be laying the groundwork to quit. That’s what she did after being passed over for a desired post. Then Firestone founded the nonprofit peer advisory group for female presidents of multimillion-dollar companies, which now includes more than 2,000 members.
“You should get out of there by the time you’re 40 and do your own thing,” she says. “There’s just so many people who can go to the top. You’re a high achiever. You want to do well. You’re going to have to take it into your own hands.”
Few barriers to entry
Would-be entrepreneurs have numerous advantages they didn’t have just a few years ago. One important reason is simply because they’re needed to drive the economy forward; small businesses account for 99.7% of the employer firms in this country, 65.1% of net new jobs since 2000 and almost 40.3% of the total private-sector payroll, according to the Small Business Administration. So the government and private-sector organizations are providing more help and money to nurture small-business ownership.
Startup costs also are lower today than ever before. “This is an incredible time to start a business because the barriers to entry are lower than they’ve ever been before,” says Diana Kander, entrepreneur-in-residence at the Ewing Marion Kauffman Foundation. “Now just a few dollars can get you started immediately.”
“Some people can get into business who never could’ve gotten into business 15 years ago,” thanks to advances such as smartphones, the web and social media, which have “really leveled the playing field,” says Andrew J. Sherman, a partner with the global law firm Jones Day who teaches entrepreneurship and business at the University of Maryland. “I’ve been at this for 30 years. I have seen startup costs go down each year. In the late ’90s, there were quotes being submitted by companies for $5 million to $7 million just to have a website built.”
You now can create a business website inexpensively or even for free, and you can print business cards or other promotional materials at low cost. Just think: The vast majority of today’s big businesses started small, Kander says, with no outside capital, and they grew… and grew. That could be you, too.
Square pegs welcome
Entrepreneurs come in all shapes, sizes and colors. They don’t have to fit anyone else’s model for the “ideal employee.” Think about Richard Branson, founder of the Virgin Group, whose dyslexia provoked punishment from teachers who thought he was lazy, and which still makes math and some other subjects difficult for him. Or Col. Harland Sanders, who was 65 when he used his Social Security check and secret recipe for fried chicken to start developing the Kentucky Fried Chicken fast-food franchise, which ultimately made him a millionaire.
Unlike Sanders, many middle-aged people laid off during the recent recession have found age to be a significant career barrier. But entrepreneurship doesn’t discriminate. In fact, people ages 55 to 64 represented 24.5% of new entrepreneurs in 2020, according to the Kauffman Foundation; that’s up from 14.8% in 1996. A 2018 study by the National Bureau of Economic Research determined that the average age of tech startup founders in the U.S. was 41.9. The researchers concluded that “the highest success rates in entrepreneurship come from founders in middle age and beyond.” While younger entrepreneurs did find success, it was at much lower rates than their more experienced counterparts.
This, however, does not mean younger entrepreneurs cannot find success.
When he started Tumblr, New Yorker David Karp was 19, “still a dippy, nerdy kid,” he told the British edition of Wired.com. Catherine Cook wanted a way to meet friends in her big New Jersey high school, so when she was 15, she and her brothers started the social media site myYearbook.com (renamed MeetMe.com after being sold for $100 million). When Nick D’Aloisio sold his Summly app to Yahoo in March 2013, a headline in The New York Times summed it up: “He Has Millions and a New Job at Yahoo. Soon, He’ll be 18.”
Just do it
Stories about uber-successful entrepreneurs captivate our imagination, but don’t let them intimidate you or cause you to postpone your start. “Being an entrepreneur is not about having a huge idea,” Kander says. “It’s about solving a problem or creating something of value. That’s not that difficult to do.”
“Get the billion-dollar idea out of your head,” says Scott Gerber, founder of the Young Entrepreneur Council, which provides tools and mentorship to aspiring business owners. Focus instead on starting a business with your own two hands that provides for yourself, your family and employees. Particularly important, says Gerber, author of Never Get a “Real” Job, “There is more of a need than ever before for young people to start a business,” as youth unemployment remains high.
Chances are you won’t get rich overnight. Ray Kroc was 52 when he started the first McDonald’s drive-in. “I was an overnight success all right,” Kroc once quipped, “but 30 years is a long, long night.”
Karen Kerrigan, president of the Small Business & Entrepreneurship Council, says she has been dismayed by some teens who’ve told her they don’t plan to become entrepreneurs because they “don’t have that breakthrough idea.” All any budding entrepreneur needs is to come up with a novel twist or approach on an existing service, idea or product, perhaps by offering different pricing or executing the business a little differently, she says.
“The truth is that 99% of businesses are old ideas that people make just a little better,” says Soliman, who co-founded College Hunks Hauling Junk with high school buddy Nick Friedman.
The pair made up to $8,000 a summer, and “I remember telling my dad: ‘I don’t even want to go back to school. I want to be a full-time trash man.’ He said no,” says Soliman, who proceeded in his senior year of college to win an entrepreneurial contest for his business plan for a junk-hauling business. “That’s when the real lightbulb went off.”
When it came time to start the business, Soliman admits it was scary. “It’s kind of like jumping off a high dive. You’re looking over the edge at murky waters.”
After a series of refusals, they finally found a bank willing to lend money to buy a single truck emblazoned with an 800 number that reached Soliman’s cellphone. “We were the junk hauler, the owner, the customer service person, so we wore every hat you could imagine,” he says. Meanwhile, they lived with their parents the first year, 2005, to conserve cash. By 2007, College Hunks Hauling Junk had eight trucks and soon started franchising; today, in summer, as many as 1,000 students work as haulers, according to the site.
“You don’t need to come up with this brand-spanking-new idea,” Soliman says. “If you can figure out a way to make people happy, that’s the easy part.”
Similarly, Shelly Sun turned frustration over trying to find care for her husband’s elderly grandmother into inspiration for a new business—BrightStar Care, a healthcare staffing company started in 2002. Sun and her husband didn’t have healthcare backgrounds. But they saw so much go badly from a consumer’s viewpoint that they took those lessons to heart to create a business that now serves 31,000 people. “We knew we certainly could do it better,” says Sun, the CEO.
Free at last
While you may not get rich as your own boss—you could. The greatest benefit to owning your own business is financial independence, because you create your wealth through your own industriousness instead of relying on possible raises and promotions from a boss. Some of the world’s wealthiest people have been entrepreneurs.
Consider these examples:
- College dropout H. Wayne Huizenga borrowed $5,000 from a family member to buy a used garbage truck, which he drove each workday starting at 2 a.m. to haul trash to a South Florida dump. Out of those humble beginnings grew the national empire of Waste Management Inc., making a fortune for Huizenga, who since moved on to other pursuits, and had a net worth of $2.8 billion at the time of his death in 2018.
- Jeff Bezos quit a Wall Street hedge fund job to sell books online from his garage in Seattle; that grew into Amazon.com, making the billionaire the world’s 2nd richest person, according to Forbes.
- Michael Bloomberg, fired from Salomon Brothers, didn’t wallow. In 1982 he started his own financial firm, Bloomberg LLP. The New York City mayor is currently the world’s 12th wealthiest person, according to Forbes, and owns at least 10 homes.
- Larry Ellison quit a programming job in 1977 to use $2,000 of his own cash to co-found a company that would release Oracle 2. He’s currently the world’s eighth-richest person, according to Forbes.
- Paul Allen quit what he considered a dead-end job at Honeywell to start Microsoft with an old school friend, Bill Gates. They were driven by dreams that computers would become commonplace. “We talked about a computer on every desk and in every home,” Gates told The Telegraph. “It’s been amazing to see so much of that dream become a reality and touch so many lives. I never imagined what an incredible and important company would spring from those original ideas.” Gates is now the fourth richest person in the world, according to Forbes.
“Starting your own business is the greatest way to achieve economic independence,” says Kander of the Kauffman Foundation, “and to change the world.”
This article was published in June 2013 and has been updated. Photo by @likeamacheen/Twenty20
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