Nate Matherson, LendEDU.com
By now, you’ve probably found most of the confetti you threw around your living room New Year’s Eve and vacuumed it up. You might also have already succeeded or failed at a resolution or two. But what you have or haven’t done in the first few weeks of 2018 isn’t what’s going to matter. It’s what you do in the rest of 2018.
Have you always wanted to start your own company? 2018 is the perfect time to do it. Not only because now is always the best time to start something, but also because there are a lot of economic factors that will be in your favor in 2018.
How do I know?
I started my business when as we were still recovering from the recession and that presented all sorts of challenges from finding investors to the difficulties of growing a business when there wasn’t a lot of economic growth happening. We weathered those difficulties, but now that the economy is doing much better you’re likely to enjoy much smoother sailing if you act now.
The Economy is Strong and Growing
The last thing you want to do is start a business when no one can afford to buy from you because everyone is just struggling to pay their bills. But that isn’t likely to be the case in 2018. In fact, the economy is growing faster than it has in a while with the third quarter of 2017 seeing a 3.3% annual growth rate. That followed at 3% annual growth rate in the previous quarter which was the first time since 2014 that the economy grew by more than 3% two quarters in a row.
The outlook for 2018 is looking rosy with annual growth projected to be between 2% to 3% – which is in the ideal range. So, what does that mean for your dream of opening an artisanal ice cream or dog toy business? It means that more people will be employed and earning money which will mean that they can treat their families to ice cream or buy Rover a dog toy. That’s great news!
You’ll be Able to Access Capital
When the economy isn’t doing well, people don’t just stop spending – lenders also stop lending. That’s because there’s more risk to lend money to an artisanal ice cream store when people are losing their jobs and their homes en masse than when they’re doing well. After all, no one will be buying your $7 honey balsamic earl grey ice cream if they don’t have a roof over their heads. It’s especially hard for small businesses to borrow during difficult financial times because lending to small businesses already involves more risk for banks since small start-ups are more likely to fail.
The fact that the economy is doing better means there is more capital available for small businesses. Don’t take my word for it though – the Small Business Lending Index showed that in the last 12 months, 11 of 18 industry sectors saw lending increases. Of those, 7 experienced over 4% growth in lending.
What’s more, the Small Business Delinquency Index showed that fewer small businesses were delinquent on payments from October to November of 2017.
Both of these are great signs that if you start a business in 2018, you’ll be able to access the money that you need in order to buy equipment, order inventory, and manage cash flow.
Another big benefit is the emergence of more online small business lenders that offer quick access to cash in both small and large denominations for small businesses. In the past, it was difficult for a small business to borrow money since many banks didn’t want to lend to them because the loans weren’t as profitable as loans to larger businesses.
Take Advantage of Low-Interest Rates
While you can start a business when interest rates are high, it’s more expensive to do so. Right now, interest rates are slowly rising but they’re still relatively low. If you need to borrow money to start your business, you might be better off acting now than waiting until 2019 when interest rates are expected to be higher, according to increases projected by the Federal Reserve.
The Best Time is Always Now
Ultimately, the best time to start something is always today – but this article has given you cold hard facts that prove that 2018 is the best time to launch your small business. That means that you have no excuses! So, it’s time to roll up your sleeves and get working on starting that business. When you ring in 2019, you’ll be happy you did.