Reasons Why Now is the Best Time to Start a Business
Right now in America, it has been said that there is a billion dollar software company being founded every three months. Contradictory to what most people believe, recession time is actually a good time to start a business.
How the Recession Makes this a Good Startup Time
There is less competition because of the recession and slow recovery. Also, starting a business when things are slow means you are ready to pick up all the business when things speed back up – you will have already established a name and customer base. The recession also causes a huge drop in overhead, because office spaces and wages are at rock bottom. Because priorities change as people focus on financial survival, there are a lot of new opportunities for businesses that never existed before. Also, technology has made startup costs significantly lower than they once were.
Traditional funding methods include small business bank loans, small business administration loans, venture capitalism, angel investors and asset backed funding. Thanks to the recession, interest rates are still quite low for loans. There are also new ways of funding which include crowd funding and tapping into retirement.
Rock Bottom Office Spaces
The average rental rate for offices space per square foot in America is $21.70. The rate for buying is $197 per square foot. And the current pace of absorption is still at half of the rates before the recession began; currently 11.9 million square feet. The top five metros for office rent spaces are: New York, NY; Washington D.C.; San Francisco, CA; San Mateo County, CA; and Suburban, VA.
Technology Has Simplified It
A decade ago, a traditional data center had to pay for system monitoring, office space, racks, service, electricity, engineering and installation, cooling equipment, powering equipment and project management. Now, with fully automatic clouds, there are huge cost savings because you only pay for what you use. Therefore, a traditional data center with its wasted resources would cost $120,000 over ten years. A cloud service is closer to $46,636.80. Costs for small cloud services for a month begin at 48.58 per month and for an extra-large service, it can go as high as $1314 per month, which is still significantly lower and more efficient than traditional data centers.
With the recession still keeping overhead costs low and interest rates down, combined with the current landscape of cheap technology, now is the perfect time for a start-up business.