Dear Dan: I’ve always wanted to start my own business. And since I just got laid off from my job, there will never be a better time than right now. Where do I get help? – Starting Now
Dear Starting Now: Never mind that unemployment in the U.S. is at a multi-year high. Forget that big companies are bleeding money and shedding jobs by the tens of thousands. According to the latest National Employment Report issued by payroll services giant ADP, small businesses have been adding jobs. And startups are one reason why.
Consider Columbus, Ohio, for example. According to the Ohio Bureau of Workers’ Compensation, the number of startups in the Columbus region jumped 85 percent in the first half of 2008. At the same time, the number of small firms shutting their doors declined 73 percent.
In many places, business incubators are playing a key role. Incubators provide space, technology, management advice, shared services and a range of other free or low-cost support to nurture startups.
Hundreds of incubators operate in cities nationwide. TechColumbus, a nonprofit that has operated for 22 years, is one reason for the boom in Columbus. The business incubator is expanding right now and expects to see a three-fold increase in the flow of startup concepts seeking help.
Here are four factors that improve the odds of startup success:
• People. If you can afford to hire employees or can bring in partners when you first start a business, do it. Well-staffed startups have better survival rates than solo operations. If this won’t work for you, at least seek out experienced mentors.
• Startup capital of at least $50,000. Not easy, perhaps, but studies show that businesses starting with less than $50,000 have higher failure rates. That’s just the way it is. The key is to have enough financing so your business can take root.
• Training. If you can, attend seminars or “Webinars” on how to start a small business or enroll in a college-based entrepreneurship program to learn the ropes. You might be the smartest geek in the world, but if you have no business sense, you’re in trouble.
• Home beginnings. To keep costs low, start a home-based business. Businesses that begin this way and then move into bigger digs later have higher success rates. •
Daniel Kehrer can be reached at
editor@business.com.
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