Earlier this week, I saw an interesting post by Scott Shane over at SmallBizTrends.com in which he highlights a trend that so far seems to have avoided media scrutiny: an apparent entrepreneurial exodus has been going on over the past five years. Though the number of people taking the entrepreneurial plunge seems to have increased in recent years, so has the number of people leaving entrepreneurial rat race.
After reading the post, it got me thinking. There are plenty of bloggers out there who have laid out what they feel will lead to entrepreneurial success. There are even tests that people can take that can measure their potential to run their own business. But the truth is that each and every year brings with it its own set of challenges and opportunities that can significantly influence one’s ability to successfully start and run a business.
That said, here are a few additional factors that will help new entrepreneurs succeed specifically in 2012:
- Access to capital. Though interest rates remain at all time lows, and several leading economic indicators suggest that the U.S. economy is making some kind of a recovery (albeit a slow one), a recessionary shadow (or maybe cloud is more appropriate) lurks yet around. The housing market, after all is still a mess, unemployment remains painfully high, the government is in many ways dysfunctional and opaque, and our global economic partners don’t seem to be doing any better. That said, fiscal responsibility and caution still rule the day, even on a personal level. Many new entrepreneurs these days have taken to bootstrapping their businesses rather than relying on outside money. There has also been a surge in demand for microloans and more alternative forms of financing ranging from business cash advances to crowdfunding.
- A very well-defined niche. One of the fallouts of the Internet boom has been an increase in competition and “noise.” With low barriers to entry, many have jumped into the pool making it hard for some smaller businesses and solorpreneurs to tread water, let alone get to a profitable place. The result: if you want to avoid sinking online then you need to find a very specific micro-niche.
- Social media fluency. Though social media has been making small business headlines for a few years now, it has become all the more vital in 2012. While conducting an effective social media strategy takes some know-how and an investment of both time and money, it is an area that new entrepreneurs and small business owners cannot afford to ignore- especially with the emergence of Google+ an all-encompassing, user-friendly social media platform.
- Patience and perseverance. Though being a successful entrepreneur often comes with a healthy dose of patience and perseverance, in 2012 those qualities will be even more important- especially in light of the above trends. It often takes time to get together the capital needed to start a business while not exposing yourself to unreasonable financial risk, and it takes time to develop your niche and brand, and then to go about building communities and followers around them.
The bottom line is that while the new year may promise opportunity for many small business owners, there are at the same time some very unique challenges to making a business work. It’s a brave new world and success will be determined by how well you understand and adapt to that which makes it new.