Why You Haven’t Started A Business?
Good morning, I just sent a Twitter survey out to my followers asking them some of their thoughts on “Why You Haven’t Started a Business”.
15% of those over 18 said that they’d already started the business 55% said they had considered starting one.
Only 11% said they weren’t at all interested in starting their own business. While I think there’s a strong entrepreneurial attitude among young people right now the rate at which we in America are starting small businesses is dropping among young people in particular. In fact it is dropping… fast.
The easy thing to do is to put the ownership of this on young people themselves.
We aren’t interested:
- We crave the stability of a normal job
- We fear failure
- I like my free time
- I don’t want to work that hard
- I don’t want the responsibility
Indeed, the social anxiety, uncertainty, and fear of failure
all showed up high up in our survey. Starting a business isn’t for the faint of heart. You have to take risks jumping business segments you don’t understand or know very little about. People who start businesses usually know the product, the service required but the nuts and bolts of business well that might be, let’s say a bit cloudy.
Okay you have to do stuff you don’t want to do. You have to hire people, and fire people too. Some of the time it sucks to own a business. Yet on the other hand you are your own boss, you ask and answer all your own dumb questions. Haven’t you thought some of managements decisions were dumb? Yup, now the buck stops at your desk along with all the decisions and problems. Now I want you to know we are LearningOnTheRun.com.
We have owned businesses. Started businesses, sold businesses and closed businesses. We have a combined 50 plus years of experience on our team. Their are lots of rewards and parts of business ownership that are super fun. Like that big idea to increase sales worked! The negotiation with a supplier that increase your profits. Hiring the right person to help you. It not only will put a smile on your face, it will help your bank account too!
I think people know that, but this very clearly isn’t just about people making different choices or starting a business. Schools have fought to attract students, while the cost of education has skyrocketed, so has the burden of student debt. That post graduation debt of student loans has pushed people toward making safer decisions and maybe fearing failure. The double sided debt relief for graduates was talked about by congress and collection methods by the IRS were full steam ahead. Some student loans have been consolidated to a more reasonable monthly payments for those that used federal loans to finish their education.
In exactly the same way the skyrocketing costs of health care in America have made people make more guarded decisions. When asked what their number one reason for not starting a business was, about half of people said that that was a
personal choice and about half of people said it was something structural and the biggest structural one of course is just access to capital. The money thing has gotten kind of weird lately.
A lot more money is coming from venture capitalists. Who are they? Super rich people or a group of people banded together to form a group that buy property, patients, companies, product lines. They basically want their money to come back ten fold, so they mostly invest in companies that can be very competitive that offer good margins but need an influx of capital for personnel or machinery. Sometimes they invest in drug companies where there’s a lot of opportunity for huge growth. If the FDA approves, let’s say a new migraine medicine. I cheated I just watched a company unveil their new migraine medicine. It will be selling for around $6000.00 a pop! Just say’n that might offer a pretty good return on investment (ROI).
Large Businesses probably have a safer path than smaller businesses in the same or similar market.
The small ones get ignored and banks are kind of focusing less and less on the thing that they’re supposed to. Helping people create new value in a product or service.
Community banks now make up just 13% of the banking sector but they still make 43% of the small business loans.
As starting a business gets more complicated people who have money might see it as simpler and probably what may be considered a better use of their time, to just invest that money in the stock market. Remember the stock market isn’t safe or a sure thing either. In fact, in our opinion, the stock market may have more risk. Today the stock market is soaring but some very smart people are clinching their teeth waiting for the Big Correction (DROP) to take place.
Meaning if young people can work in a big gigantic entrenched company rather than in their own small businesses, it is a safer choice. In some cases they may think of their job and company as a status symbol. Like driving a Bemer or Lexus offers immediate visual status to the driver. I always thought they were cars. Now I find out they are considered a social status symbol, who knew?
This is especially true if you have a lot of money, or let’s say more money is in the hands of right people who manage a lot of it. If you have a ton of money starting up a small business is like an inconsequential investment in exchange for a whole lot of work and hours, that may make you think twice.
Then the massive amount of money pumped into the stock market pushes these gigantic businesses to grow or die. That results in these massive behemoths taking over, not just old markets but new markets, the way Amazon and Netflix have done.
Meanwhile the middle-class wealth has actually
decreased so the people who really want to work their butts off to make a new things happen might not have access to the money to do that. That is where a solid business plan comes into play for funding. Either an investor or the SBA, small business administration for startup capital.
“Why You Haven’t Started a Business”
The final reason I’m going to talk about why young people might not be starting businesses is, because I think they are.
This is the 1099 generation, on the side-hustling contractors or subcontractors. People making it work with a combination of jobs. They may have a Etsy store, monetized websites, review articles, combining their day job and side jobs for income. Every one of those on the side hustlers is basically a sole proprietorship. If you count them in this way, this generation is starting up businesses like never before. But the path to hiring that second person to help them is difficult, unless they make them subcontractors too. Then they become one of the 1099 generation as well.
When all the competitive supply chains are global and employment regulations and business taxes are tangled up in a mountains of red tape, it makes you stop and think twice. It’s unclear how many are actually doing these jobs on the side. I know glass installers, mechanics, painters, construction workers, electricians, HVAC installers all will do some work on the side. Usually their employers don’t mind because it is limited to friends and family. But adding an extra 10 or $15,000 a year to your income isn’t chicken feed.
It might not be as interesting for many to fix a deck, paint
a house, put up a fence, create a computer program or phone app for sale. This isn’t a simple story; people much smarter than me are doing much intense research, much more than I have done to understand this underground 1099 workforce.
We certainly want more people instead of fewer people to know the joy of starting their own business. Giving somebody else a job, or putting a team together, creating value where there was no value before. Maybe making a better mouse trap or providing services with a smile and an invoice.
Have any thoughts? Comment Below.
Why You Haven’t Started A Business?
Tell us what you would do, if you had access to the capital you need to do your startup or buy an existing business. We are really looking forward to your comments on this Article. We will be checking them out all to see how this poll goes. We know how the twitter poll broke down now we’ll see if this online article tracks any different.
Base Article found on Youtube.