- February 28, 2022
- Posted by General Electric Credit Union
- 3 min read
Starting a New Business: What You Need to Know
GECU Voices brings you guidance and insight from experts within the Credit Union. This article is brought to you by Jason Leyda, CTP, Vice President of Business Support and Treasury Management.
One result of the pandemic is our altered perception of the terms ‘work’ or ‘job.’ How we view them, and employment, is forever changed. In 2020, there was a staggering number of new businesses filings in the U.S. with over 4.3 million in new business applications – a million more than in 2019.1 As of November 2021, 2020’s impressive numbers have already been eclipsed. You may be wondering: Why are there so many businesses being started during this time?
Being your own boss
A person’s dream of owning a business and being their own boss is very appealing and often tucked away in their mind to consider at some point. Government shutdowns in the spring of 2020 impacted many businesses, and millions of individuals were negatively affected by job or severe income loss as a result. They were forced to reskill a bit and find ways of providing income for their families. Some acted on that little voice in their head and decided now is the time to become their own boss and start a business – and they were not alone. In 2019, 28% of American workers had some form of self-employment income reported on their tax return.2 That is roughly three out of ten individuals in the U.S. who consider themselves their own boss. Some have employees, but the majority do not. According to a different study, 62% of small businesses in the U.S. do not have any staff besides the one owner.3
Taking the first step
Are you ready to join the millions of individuals exploring the idea of starting a business? Does being your own boss sound exciting or does it scare you? There are a lot of pros and cons you should be aware of, and many places to turn for help as you make preparations and decisions.
Here are some stats to keep in mind moving forward:
- 20% of small businesses fail in the first year, while 50% make it more than five years.4
- The number one reason a business fails is there is no market need.3 You must know the market, who you will be offering your products or services to, and how you will convince them to patronize your business.
- The second reason a business fails is lack of funding.4 Most individuals start by personally funding their business. This includes funds from personal savings, investments, retirement funds, or equity in real estate. Others may consider outside sources like debt on the business or investors.
- 97% of self-employed professionals say they would never go back to traditional employment.5
- 43% of employees believe the biggest benefit of being self-employed is control over one’s career.6
There are numerous resources available to individuals who are considering starting their own business:
- The Small Business Development Center (SBDC) Hamilton County provides no-cost, confidential, in-depth, one-on-one consulting for individuals who may want to start a business. Ohio SBDC Hamilton County – Urban League of Greater Cincinnati (cincinnatieec.com)
- Greater Cincinnati SCORE provides free one-on-one or team counseling for existing or new businesses. Take advantage of free to low-cost business workshops and complimentary local and national business resources. Greater Cincinnati | SCORE
- In 2021, General Electric Credit Union created a four-part video series on how to start a business. Webinar On Demand Series - YouTube
Now may be the best time to listen to the little voice in your head and become your own boss. By educating yourself and surrounding yourself with the right tools and partners, you will increase your chances of success. GECU is here to Improve the Quality of Financial Lives for both members and business members alike. Sit down with one of our Business Services team members to discuss your vision and how we can help you get there. If you’re not a credit union member yet, eligibility is simple: you just have to live, work, or worship in select Ohio, Indiana, or Kentucky counties.