The North Bay has a variety of resources to help entrepreneurs get the right answers to these questions. The Sonoma State Alumni Association networking event on Tuesday, Aug. 30, from 7:30 a.m. to 10:00 a.m. at the Sonoma Mountain Business Event Center will bring together many of the key North Bay economic development agencies to help answer such questions and give practical advice about starting a business. For further information, contact the SSU Alumni Association at 707-664-2426 or email email@example.com.
An article in the Wall Street Journal entitled “Shrinking in a Bad Economy: America’s Entrepreneur Class” recently caught my attention. The author asked whether or not the damage done by our weak economy would have a long-lasting effect and thus discourage the next generation of entrepreneurs.
In my work as a consultant to North Bay start-ups and entrepreneurs, I’m often asked whether this is a good or bad time to start a business. The answer, as with so many things is, it depends.
Let’s first explore the question by examining the reality of the current situation regarding small business in America. The news at first glance tends to be rather discouraging. But as Winston Churchill once said, “A pessimist sees difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
One of the key metrics often used to gauge the strength of U.S. small business is SBA lending activity. For the last couple of years it’s not been good. According to a recent article in CNN/Money, bank lending to small businesses fell $15 billion in the first quarter of this year. The article also noted that small business lending had declined steadily during the previous three quarters and had fallen on a yearly basis since hitting its peak in 2008.
Another troubling indicator is that according to the U.S. Bureau of Labor Statistics, the number of jobs created by businesses less than one year old fell from 4.1 million in 1994 to 2.5 million in 2010. Combine this with current economic uncertainty and market volatility, and one could make a compelling case for holding off on any new business start-up.
However, one fact still remains: according to the U.S. Bureau of Labor Statistics, the size of the U.S. economy is estimated at $15 trillion. And the Economist recently estimated the global GDP to be $65 trillion. In my book, that signals a huge opportunity for forward-thinking entrepreneurs.
Times of exponential economic shift lead to cracks and openings in the marketplace. We are seeing a sea change in how consumers approach purchases by being more value-oriented. The world is witnessing a move toward sustainability, and innovative new technologies are being introduced almost daily. Combine this with ever-more efficient ways to move products and services globally, and voila: entrepreneurial opportunity.
But success is never easy. To win today in small business requires a completely new way of thinking and a new set of entrepreneurial skills. The business models of today are laser-focused on solving key needs in the marketplace and responding quickly to a dynamic environment, as well as requiring less upfront capital to get started.
I’ve often said I’m most excited about working with entrepreneurs because they are the ones who will solve the world’s problems. If there is not a problem confronting consumers in the marketplace, there is no need for a new business. But if there is a problem, an innovative business will urgently be needed to solve it.