2015 May Be An Ideal Year To Start A Business

If your New Year's resolution was to start a small business, time may be on your side in 2015.

Optimism among small business owners increased last year, reaching 98.1 in December 2014, the highest reading since February 2007, according to the National Federation of Independent Business. Experts say a number of factors could boost Main Street optimism and entrepreneurship rates further in the new year, among them access to cash, low fuel costs and a number of tax incentives.

Nigel Thomas, 38, left his career as a software engineer to soft launch his New York City-based business in November 2014. This year, Thomas plans to expand his company, GoLocker, which allows consumers who don't live in buildings with doormen to use lockers to intercept packages, so they don't have to wait around for delivery.

Thomas so far has two sets of lockers in bodegas in Brooklyn, and plans to open three more locations in the first quarter of this year. Tax credits were a key part of why Thomas decided to take the entrepreneurial plunge.

"New York City has great incentives around green initiatives, and as our business expands we would like to take advantage of those tax credits," he said.

Another factor encouraging entrepreneurship is low interest rates.

Historically low interest rates and its impact on small business owners should not be overlooked, says Gene Marks, founder of small business consulting firm The Marks Group. For example, the U.S. Small Business Administration iszeroing out fees on loans of $150,000 or less through fiscal year 2015, Marks says.

"Some banks are still wary about giving small-business loans, but they have created a market for the micro and alt lenders of the world," said Marks, adding there are more options to access capital.

Alternative lenders including OnDeck Capital and Lending Club can have looser lending standards and quicker turnaround times for cash, although interest rates can be quite high.

Lower energy prices also are making starting a venture more enticing.

While low gasoline prices may give consumers more cash to spend, lower fuel prices also mean fewer worries for small business owners, Marks says. Energy costs are a top business expense for small businesses. 

The U.S. average for regular gasoline is about $2.19 a gallon, the lowest since May 2009, according to AAA data.

In other cases, tax incentives are luring potential entrepreneurs.

One tax incentive that start-ups can take advantage of in 2015 is the Small Business Tax Credit. This is for small employers that offer workers health insurance through the Small Business Health Options exchange setup under the Affordable Care Act. To qualify, workers must have fewer than 25 workers all making an average of $50,000 or less. Employers who offer their workers coverage through the exchange are eligible to receive up to 50 percent back on those premiums, says Mike Trabold, director of Compliance Risk at Paychex, a payroll and human resource services firm. 

Small businesses that start a new 401(k) plan can claim a federal tax credit for the first three years of the plan to offset their start-up costs, including costs to set up and administer the plan, as well as costs to educate employees. Trabold also points out that the maximum contribution has increased in 2015 to $18,000.

Finally, Trabold says energy investments and tax credits are worth considering.

If a small business buys an energy system including solar panels, fuel cells or wind system, business owners may qualify for these tax credits under the Energy Improvement and Extension Act of 2008's Business Energy Investment Tax Credit. This credit applies to energy systems installed on or before Dec. 31, 2016.

Of course, entrepreneurship is inherently risky, and the job market has picked up. That suggests some workers may feel less pressure to become their own boss out of necessity. In the latest jobs report from the Labor Department, 321,000 jobs were added in November, the 10 ^th consecutive month of gains of more than 200,000 jobs. The unemployment rate held steady at 5.8 percent.

Despite an improved employment outlook, some entrepreneurs including Thomas can't resist the allure of incentives and the chance to be their own bosses.

"It's difficult to sit behind a desk and not be able to use your creative side," Thomas said. "But if you're a real entrepreneur, you will never be truly happy working for someone else."             source

When To Quit Your Job And Start Your Own Business

Dear Annie: I've been in my current job for about five years, and not only do I dislike what I'm doing, but our department got a new boss a few months ago who drives me crazy. He has no integrity, encourages us to take shortcuts that do a disservice to customers, and second-guesses every decision anyone on my team makes.

I've always wanted to start my own business, and I think I have a solid idea for a company. The thing is, I read your column mentioning the high rate of failure among startups -- the ones we never hear about -- and I'm debating with myself over taking the plunge. How do you know if you're really ready to run your own company? -- Thinking It Over

Dear Thinking: Good question, especially given the current IPO gold rush, which is creating a whole new batch of overnight-millionaire entrepreneurs. Still, your main motivation right now seems to be getting away from your terrible boss, and that sets off some alarm bells.

"You never want to start a company as a reaction to a bad situation," says Ashish Toshniwal. "You need to have an idea you are really passionate about, or you'll never make it through the first couple of years, which are extremely tough."

Toshniwal has been in your shoes. About six years ago, at 26, he was unhappy in his job as an engineer at Dell. At the same time, he and a friend, then-Yahoo-engineer Sumit Mehra, were building Facebook apps for fun in their spare time. When smartphone technology came along, the pair quit their jobs to launch Y Media Labs, which now develops mobile apps for PayPal, eBay, Bank of America, Symantec, and many others. The company has grown from the two founders to 141 employees, and Toshniwal expects to hire about 80 more staffers by the end of the year.

“We were really passionate about this new technology, and we saw an inflection point, where growth was just about to take off,” he says. “Wanting to leave an unchallenging job, or any particular boss, was never the motivation."

It shouldn't be for you, either. "You have to start with what your true passion is, and then work backward and find a way to pursue it,” says MJ Gottlieb. “You might find that’s by getting a different job, rather than starting a business.” Gottlieb is the author of How to Ruin a Business Without Really Trying, a compendium of 55 mistakes he made while starting and running six successful companies over the past 23 years. "Above all, don't quit your job because you believe you have a great idea for a business,” he adds. “An idea is not enough."

So, what is enough, then? Consider your answers to these four questions:

• Do you have any evidence that your idea will fly? Too many entrepreneurs start companies without doing enough research, or asking enough hard questions, to make sure their product or service is "something that people actually want or need, and that will entice business away from competitors," says Gottlieb. "Especially if you hope to attract investors, you need customers and revenues. Nobody funds an idea." One way to try out your business without quitting your day job: Build your company on the side, in your spare time, until you know for sure it can survive in the marketplace.

• Are you ready to be flat broke for a couple of years? Toshniwal and Mehra funded Y Media Labs with their own savings and credit cards, and then took no cash out of the venture for the first two years while they built a solid customer case and refined their mobile-app technology. "We lived a very frugal life," says Toshniwal. "In fact, we took such a hit financially that we almost gave up." This isn't everyone's cup of tea. Notes Toshniwali, "If you work for someone else, you always get paid no matter how the business is doing." Not so with a startup.

• Are you good at solving problems and overcoming obstacles on your own?One thing Toshniwali missed after he left Dell was the enormous corporate support system he had always taken for granted. "As an employee, you have access to the company's resources. You can usually assume your manager or someone else will take care of details and problems that get in your way," he says. "In a brand-new enterprise, it's just you doing everything -- while being under intense pressure to produce results." This is why it's not unusual for exhausted would-be business owners to run back to a cubicle somewhere.

• Would you mind giving up a life outside of work? And, if you have a family, how do they feel about it? "As an entrepreneur, you're always on call, including nights, weekends, and holidays," notes Gottlieb. "I've had to miss a lot of birthdays and events, and let down a lot of family and friends. At one point, I realized I hadn't taken a vacation in 14 years." In what has to be in the running for Understatement of the Year, Gottlieb adds, "The life of an entrepreneur is not in everyone's DNA." Many entrepreneurs -- including those who have real-life, flesh-and-blood spouses or significant others -- say they feel married to their companies.

If your honest answer to all four questions is "yes," then go for it. But if any of the four (or more than one) gives you pause, think about looking for a different job -- maybe even inside your current company, but with a better boss -- instead. Good luck.

Talkback: If you've ever quit a job to start a business, what was the biggest adjustment you had to make? Leave a comment below.            source