Entrepreneurship is scary, and small businesses tend to be volatile structures. With a high rate of failure, low levels of stability, vulnerability to market fluctuations and new competition, and unpredictable performance even with a great idea in tow, it's no wonder why most new business owners are at least somewhat nervous about their latest ventures. With a major economic downturn in recent memory, as well as questionable developments in the global economic climate, you might think that these worries have only compounded over the past year -- but, in fact, the opposite is true.
A Resurgence of Optimism
According to a survey conducted by small business lending platform Credibly, 73 percent of small business owners are optimistic about their success in 2016, reporting a "favorable" outlook on the year ahead. The tech industry seems to be the most optimistic, with nearly 78 percent of technology company owners expecting their businesses to be successful this year, while even the least-optimistic industry -- manufacturing -- still reported favorable outlooks from over 61 percent of business owners. So, why are business owners so excited about 2016? What factors are making these entrepreneurs optimistic about their businesses' performance?
1. The increased valuation of early-stage companies. Part of this optimism is due to a general rise in the positive perception and valuation of early-stage businesses. Over the past decade, early-stage valuations have risen modestly, year over year, with exceptional leaps forward during the past two years. Investors are willing to invest more in startups, and with so many tech startups achieving billion-dollar-plus valuations over the span of a few years, it's no wonder why the public has become obsessed with new companies. Every startup success story makes entrepreneurs a little more comfortable (and a little more excited) about starting an enterprise from scratch -- plus, valuations are still rising, increasing capital potential for entrepreneurs everywhere.
2. Greater flexibility. Today's businesses are extremely diverse, thanks in part to the technology available to new business owners. It's possible to open up a traditional brick-and-mortar business, such as a coffee shop, and be successful, but it's also possible to develop an app that you manage from your living room. This amount of diversity and flexibility makes it possible for more people -- such as new parents or people with limited financial resources -- feasibly to start and manage a business. They've seen success stories of businesses that started in basements, and they aren't intimidated by any one shortcoming or non-traditional approach.
3. Local business emphasis from Google and Facebook. Even big players, like Google and Facebook, are doing what they can to help out small businesses (and maybe make a little money doing it). Both companies offer relatively inexpensive geo-targeted advertising, giving local businesses a way to be competitive, even with a limited budget or in a saturated field, but they're continually working on developments to make it easier to connect consumers with local businesses. For example, Facebook is testing (and conceivably launching) a new function similar to Yelp, which allows users to rate, review, and research local businesses. Google, too, is optimizing its local search algorithm, giving more convenient options to mobile and local searches (such as one-button phone calls and directions). The support of these major tech players mean that local businesses, which are usually small businesses, have more resources than ever before.
4. Free marketing tools keep on expanding. Speaking of resources, the number of free marketing resources available to modern businesses is staggering. There are hundreds of marketing publications online giving free information and advice on how to build and market a business, but beyond that, there are dashboards, apps, and other tools that make the marketing process easier. Strategies like email marketing and SEO can feasibly be started with zero capital (just a lot of initial time), and analytics platforms like Google Analytics provide practically unlimited, free information about your campaign results. Similarly, social media platforms are almost always free (for organic communication use). These platforms seem to multiply every year, giving more and more free options to small business owners everywhere.
5. A generally favorable economic outlook. The general economic outlook is always debatable: you'll always find at least one person claiming that the next recession is around the corner, and at least one other who claims that we're on the verge of a great economic breakthrough. Of course, the reality almost always lies somewhere in the middle. The past several years have seen steady, reasonable levels of growth, and there's no major indication that this year will prove to be extreme, one way or the other. We're in the midst of a calm, steady growth period, and that makes small business owners feel both comfortable and confident in their future plans.
Whether you're a seasoned entrepreneur, or you're just thinking about the prospect of starting your own business, these factors have to put a smile on your face. Today's technological sophistication, startup-focused economic climate, and rich field of opportunity make it more possible for business owners to build something truly capable of thriving. Of course, that's no excuse to be lazy. Original thinking and hard work are still necessary parts of the equation, but these factors make it just a bit more comfortable to jump into the scene.