When the American economy feels secure, workers take risks.
In 2014, the number of people starting a business — not because of necessity, but from choice — began to accelerate, after numbers dipped to a 20 year low following the “Great Recession,” according to stats from Census data kept by the Kauffman Foundation, a non-profit focused on entrepreneurship.
These new starts don’t reflect all the ways to make money Americans have discovered via the internet, like selling on eBay, says professor Jerome Katz, Saint Louis University.
Still, the business of America is increasingly big business. Names such as Amazon and Walmart have displaced thousands of family-owned firms, Katz says.
Competing against the giants amplifies the risk for entrepreneurs. “It is very hard to compete on price,” Katz says. Finding a unique service or feature is essential for survival.
Typical mistakes, says Katz: “Sinking a lot of money into a start-up before you know if your product or service will sell.”
The roughly half of a million Americans striking out on their own this year probably don’t take full advantage of the free help that’s available, Katz adds. “Nationally, the SBA, Agricultural Extension, SCORE and state-level Small Business Development Centers all provide very good, free advice on starting and growing small businesses.”
Research conducted by the Kauffman Foundation, says spokesperson Barbara Pruitt, found that 1Million Cups (1millioncups.com), a free program designed to educate, engage and connect entrepreneurs with their communities over coffee, has been successful at “making interactions across entrepreneurs, mentors, customers and investors easier.”
The typical entrepreneur now has some business experience, since young people aged 20 to 34 represent just 24 percent of those launching start-ups.
Student debt is holding many young adults back from taking a risk on their own, says Leabdra Elberger of Venture For America, a non-profit.