Starting a small business is both exciting and scary. Whether you’re the kind of person who plans for every worst-case scenario or likes to jump in on an idea first and figure out the details later, there’s a lot to consider before launching your idea.
One thing that many small business owners stress about is when to start their business. There are many different factors to consider when thinking about when to start a business, but one of the most important is the state of the economy.
To help you decide if 2024 might be a good time to start your business, here are a few details about what’s happening in the economy right now and some of the concerns some business owners have.
Why some people hesitate to start a small business in 2024
If you’re trying to read economics right now to figure out if 2024 is a good time to start a business, good luck. Economists have been saying for nearly a year now that a recession is just around the corner. And yet, the economy grew 4.9% in the most recent quarter and the unemployment rate is at a very low 3.9%.
Experts cannot fully agree on what happened. Some economists think there is a 56% chance of a recession next year, while others think the economy will slow but avoid any significant recession.
At this point, you may have a better chance of predicting a recession by flipping a coin.
But even without a recession, a slowing economy can cause consumers to spend less and hurt small business profits. Already, 62% of American workers say they are living paycheck to paycheck, and consumer credit card debt has reached a record high of more than $1 trillion.
What you should pay attention to if you are starting a business in 2024
Even if there isn’t a recession in 2024, based on what other business owners have recently said, there are a few factors you should consider before starting a small business.
1. Inflation is still a significant problem
A recent report from the National Federation of Independent Business (NFIB) found that ongoing inflation is one of the top concerns for business owners, with 23% saying it is a problem. Inflation forced many businesses to raise their prices, but the high cost of goods and labor did not necessarily increase their profits.
2. Quality of work can be a problem
The NFIB report found that 23% of business owners said the quality of their workforce is their biggest concern with inflation. Finding employees is still difficult, and 61% of business owners have recently hired or are trying to hire. Some businesses also plan to increase labor costs, with 23% saying they will do so in the next three months.
3. Capital is available but expensive
As the Federal Reserve has raised interest rates, almost all types of debt have become more expensive, including business loans and business credit cards. The good news is that access to capital is still available, with only 2% of business owners reporting their borrowing needs are unmet and 31% borrowing regularly. But with interest rates rising, interest rates on small business loans are still higher than in recent years.
Only you can decide when the time is right
Unfortunately, there is no crystal ball that tells you when is the right time to implement your idea. But there’s no denying that the economy needs small businesses. The White House recently reported that 56 million US workers work at companies with fewer than 50 employees, accounting for 45% of all private sector jobs.
While you should definitely consider all the potential challenges you might face if you start a small business in 2024, only you can decide if the time is right to finally bring your idea to fruition.
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