Earnings season is upon us once more, with CEOs beaming over their latest earnings reports, yet cowering when the inevitable question about domestic hiring is pressed upon them. Growth, we are told, will come from international efforts and coincidentally, the majority of hiring will be done overseas as well. Those prognostications do not bode well for the nation’s unemployment figures, and since the Obama administration has not gotten around to putting curbs on outsourcing, the 8.4 million jobs that were lost during this latest recession will be a long time in returning, if ever.
Unemployment may be the witch’s brew in most parts, but for many, it is the catalyst that is making them take the leap into entrepreneurship. From little Grandmas packaging up their best cookie and toffee recipes in Nevada to couples making soap and other aromatic products in their basements in North Carolina, Americans are having to face hard facts with more creativity than have past generations.
Typically, burgeoning entrepreneurs would secure an SBA loan from a local bank by using the equity in their homes as collateral. That business model does not work in today’s recovery market. As one Small Business Development Center official states, “In the past, a lot of new start-ups took money out of their homes, but the housing market is a huge risk right now. Credit for small businesses has dried up, making it hard for those without a track record even to borrow short term.”
The lack of home equity and available credit, however, has not dampened the entrepreneurial spirit one iota. The majority of new businesses these days get their start as a home-based venture. You may have to start slow and live on a shoestring, but the overhead is low and initial products can be marketed at reasonable prices that the customer is willing and able to pay for in today’s bargain-hunting times. Quality always sells when priced correctly.
Entrepreneurship is not for everyone, but for those who want the chance to live out their dreams and be their own bosses, there are a multitude of local agencies, helpful websites, workshops, and newsletters available that are designed to help you every step of the way. Starting a new business is challenging. Acquiring working capital is not easy in these days of tight credit, no matter how well written or how beautiful your business plan document may look. Restaurants and retail shops are best deferred during a recession, but that does not mean that your dream has been denied.
In the meantime, home-based start-ups are thriving. Regional development centers are searching for more counselors and loan guarantees for new business ideas. If our nation is ever going to make a dent in the present unemployment figures, it will have to start with small businesses. Studies, time and again, have confirmed this fact that our entrepreneurial leaders are the ones who create new jobs, starting from the bottom up.
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Category: Startup Advice