State of the Entrepreneur, 2012

It’s two days into 2012 and I’ve already heard many suggestions about what’s to come: The UN has named 2012 the year of sustainable energy. The Chinese lunar calendar lists 2012 as the year of the dragon. I’ve even read a physics article suggesting that 2012 may just be the year of cold fusion.

I’m not about to suggest that you plan your schedule around these grand pronouncements, but I do have one of my own. I firmly believe that 2012 is a year for entrepreneurs. The trends are certainly in our favor, at the very least.

Where We Are Now

The current economic situation, to put it bluntly, continues to suck. Phrases like ‘jobless recovery’ seem to be in every other article, making it feel like there’s no end in sight. It feels like there are no jobs out there, and more people are looking every day.

But business isn’t so bad for a lot of us. Freelancers, start ups and small businesses are making money right now. More people are realizing that there are still plenty of ways to make money, beyond finding one of those elusive nine-to-five jobs.

That fact shouldn’t be newsworthy, either: during the Great Depression, a lot of new businesses opened their doors. Hewlett-Packard, for instance, got its start with just a little bit more than $500 at the end of the Great Depression. So did Allstate Insurance, Converse and Revlon. Starting a new business during a depression doesn’t guarantee success, of course, but if you can start a business with an ingrained culture of doing everything as lean as you possibly can, you’ve got a head start for growing that same business in the future.

Less to Lose

There are a lot of opportunities for entrepreneurs right now. Whether you’ve been freelancing, working for the man or are just getting out of school, think long and hard before hunting for a job. A lot of big companies aren’t hiring, after all, but many are working with contractors and freelancers. They still need help to make sure that they keep earning money. Since contractors can handle short-term projects, don’t need office space and are generally less expensive to work with, it’s a win for companies using contractors instead of employees.

It’s not such a bad deal for contractors, either. Rather than working on salary, a contractor who does things right can walk away with a high hourly rate and avoid unpaid overtime entirely. It’s also relatively easy for someone to start out as a freelancer and turn her work into a much larger business, with sub-contractors or even employees of her own.

Right now, entrepreneurship can be particularly appealing because it’s just not as risky ask when times are good. When you have no guarantee that an employer will be able to offer you health insurance or a steady paycheck, employment looks a lot less secure.

A lot of people are suggesting that big businesses will not be interested in going back to working with full-time employees even when hiring a larger staff is more financially feasible. But I think that a lot of former employees will also be uninterested in going back to nine-to-five gigs after building up a higher income and figuring out that they can cover benefits themselves.

Earning Money the Hard Way

Personally, starting up a new business always seems like the easy option to me. I’m aware that there are people out there who are just better equipped to work for an employer than I am and perhaps even enjoy it. That’s cool; it takes all kinds. But entrepreneurship does really seem like an easier option than some of the ways that people are scraping by right now.

I have friends who put together these patchwork livings, trading sorting out storage units for housing, picking up a little freelance work online, selling craft projects here and there, and taking odd office jobs and temp positions to keep the money rolling in. These aren’t people who wouldn’t normally be able to find jobs — it’s just that they’re living in places where even the position of cashier at the local fast food joint has no turnover. It’s the hardest sort of existence I can imagine. We really are talking about earning money the hard way.

Some of those patchwork pieces could very easily make for decent businesses. It’s an opportunity that at least a few are exploring. With the low cost of starting a new service-based business (ten dollars for a domain name and a few dollars a month for hosting), these people are a driving force behind the entrepreneurship trend.

Where We’re Going

Looking back, I’m pretty comfortable calling the 20th century the Century of Big Business. Big corporations flourished in a way that they never have before. But the 21st century will be the era of the individual and small business — the century of the entrepreneur.

We’ve already seen the start of this particular trend. Big companies that we rely on every day start in garages with two co-founders and a few hundred dollars. Some of the tools I use for running my business have millions of users and less than a dozen staff members.

2012 is just one more building block for this trend. I’m not expecting anything particularly momentous this year — I’m a lousy fortuneteller at the best of times — but the trend is there and it’s going to keep growing.

Image by Flickr user Sally Mahoney

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