A common question many hopeful, yet hesitant, entrepreneurs ask me concerns timing. “Should I put my idea into action now, or would it be better to wait?”
My answer: As long as you’re excited and prepared, this is a uniquely ideal year to launch. The best businesses to start in 2021 include everything from e-commerce to personal fitness training to pop-up dining establishments.
So, this week, I’m dedicating Business Banter to the seven reasons 2021 is especially perfect for start-ups.
Have a business question for Erica? Drop her a line at the Ask Bankrate Experts page.
Commercial space may be a steal
If you’ve been wanting to lease an office or open a shop, restaurant, cafe, gym or anything else that requires a storefront, you’re probably in a great position right now. In many parts of the country, commercial space can be negotiated so the rent is affordable, and some prices are already discounted.
There are also interesting options available for small businesses, such as short-term leasing arrangements and shared spaces, which can lower costs because the rent is covered by multiple people.
Austerity is giving way to indulgences
In 2020, the economy retracted as people shopped less, stopped going out for drinks and food and all but ceased traveling. As the pandemic subsides, however, nearly all regions in the U.S. will open up—as well as consumers’ wallets.
Pent-up consumer demand is real. Some forecasters are predicting this decade may be a roaring 20s, which isn’t so much about the flapper costumes and jazz but about a spike in consumer spending. So, if you’ve got a product or service to sell, get ready for eager buyers.
You were laid off
If you lost your job last year, you were among millions who also did. The country’s unemployment rate hit 14.8 percent in 2020, a level not seen since data collection started in 1948, according to the Congressional Research report. Today, many people are still left without a traditional paycheck.
Instead of depending on a company to hire and keep you on as an employee, you may want to take charge and create your own career. At 23 percent, the top motivation people cite for starting their businesses is the desire to be their own boss, according to the 2021 Guidant Financial and the Small Business Trends Alliance survey. That number is followed by dissatisfaction with corporate America at 17 percent—an 11 percent increase over 2020, likely due to the struggles (including layoffs) employees faced during the pandemic.
You have an incredible idea
After interviewing countless small business owners about their individual motivations for starting a business, a constant theme emerged: each had a terrific plan and the energy to see it through to fruition. And almost everyone wished they had started their business sooner. So, if you have a concept that you’re truly excited about, stop putting it off. Every year you delay will be time wasted.
Need guidance on the best industries to start a business in 2021? According to ReallySimpleSystems, you may want to focus on food delivery or health and wellness. As far as best online businesses to start in 2021, Shopify suggests everything from selling your own handmade products to reselling clothes and other items for a profit.
You’ve already done the legwork
You’ve talked to people within your industry, met with mentors, bored your friends and family members about what you want to do, took everyone’s advice under consideration (after insisting they all tell you the unfiltered truth) and developed a viable business plan. You’re already in great shape.
Funding is available
Launching a business typically requires more capital than most people have in savings. Thankfully, there are many financing sources available. This includes asking people who you trust to invest, participating in crowdfunding platforms (such as Kickstarter), borrowing from a bank and pursuing Small Business Administration loans.
Do not forget small business credit cards. Those with 0 percent intro APRs are packed with valuable rewards. The 0 percent timeframe means that you can charge what you need for the business but won’t be charged anything in interest on revolving balances. If there is a debt remaining at the end of the introductory term, the issuer will assess interest based on the card’s regular rate, so keeping that in mind and planning ahead will be essential.
Here are just a few examples of business credit cards that offer 0 percent APR introductory rates and great rewards:
- Ink Business Unlimited® Credit Card: 0 percent intro APR on purchases for 12 months (13.24 percent to 19.24 percent variable APR after). It comes with a $750 bonus cash back after you charge $7,500 within the first three months of opening the account. You will also earn an unlimited 1.5 percent cash back on every purchase you make for your business.
- The Blue Business® Plus Credit Card from American Express: 0 percent intro APR for 12 months from date of account opening on purchases (13.24 percent to 19.24 percent variable APR after). Earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership. You’ll also earn 2X Membership Rewards points on the first $50,000 you spend per year (then 1X points ) and an unlimited 2X points on prepaid rental cars booked through AmexTravel.com.
- U.S. Bank Business Cash Rewards World Elite™ Mastercard®: 0 percent intro APR for 12 billing cycles on purchases and balance transfers (13.99 percent to 22.99 percent variable APR after). It comes with a welcome offer of $500 in cash back when you spend $3,000 in the first 90 days of opening your account, and you will earn 3 percent cash back on eligible purchases at gas stations, office supply stores and cell phone/service providers. Plus you’ll earn 1% cash back on all other eligible purchases. It also offers a 25 percent annual cash back bonus based on your prior year’s cash rewards (up to $250).
Make sure to review other business credit card options before deciding on the right one for you. Not only should it match your credit rating, but you will want it to have the right types of rewards for your needs. To qualify, good to excellent personal credit is usually necessary.
Once you have the card, you can start to build your business credit profile by using it responsibly. Eventually a corporate card may be in your future, which is designed for businesses with millions of dollars in annual revenue.
I firmly believe that 2021 will be a yearlong springtime for small businesses. With intense hardships receding into the past, passionate new entrepreneurs are ready to burst onto the scene.