May Is National Small Business Month — Here Are 3 Things You Need To Know About Opening a Biz in 2023
It’s been a rocky few years for many, especially small business owners.
“Inflation has sent business operation costs skyrocketing and left aspiring entrepreneurs with less expendable income to invest in new businesses,” says Matt Schulz, LendingTree chief credit analyst. “Rate hikes and generally skittish lenders have made it harder to get small business loans. A tight labor market is creating staffing challenges. In short, it’s pretty tough out there.”
But with the COVID-19 public health emergency ending and signs the economy is recovering, you may wonder if now is a good time to start a business.
In honor of National Small Business Month in May, here are three things you should know about opening a business in 2023.
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No. 1: Remote-friendly businesses may have a leg up
Remote work had a major uptick in interest as the pandemic struck, and the ability to work from home became a necessity rather than a luxury in the minds of many Americans. And although the pandemic is winding down (depending on the source), that doesn’t mean people aren’t still interested in those jobs and the flexibility they afford.
If you plan on hiring employees, offering remote work whenever possible can be a good idea — especially if you want to attract solid talent for a potentially lower price.
No. 2: It may be more difficult to secure funding
For example, the Small Business Administration (SBA) can be a great resource for creating your business strategy, finding funding and setting yourself up for success. The SBA can also help you create a business plan, which should include information such as profit margins, sales projections, the competitor landscape and marketing plans.
Because of the increased difficulty in finding funding, a business plan will be even more important to get right if you need external funding to start. After all, many lenders use business plans to help determine if your idea is worth investing in. Your credit score will also play a vital role. You may want to focus on things like reducing credit card debt and signing up for autopay to increase your score.
No. 3: Timing isn’t as important as preparation
“Timing can be an important factor in a business launch, but there are also a million factors that go into determining the perfect launch time, so it can be extremely challenging,” Schulz says.
For example, if you try to wait for interest rates to fall or for lending to pick up again, you could wait so long that your competitors have time to establish a foothold in the space while you’re in the starting blocks.
Instead of focusing on what you can’t control — such as impactful world events or interest rates — you should focus on the aspects of your business idea you can control. This includes understanding your customer base and competitors, getting feedback on your ideas or products and managing how your business will respond to external factors.