Is the Rise in New Businesses Just Another Bubble for the Unemployed?

New small businesses are quite a common sight in the UK. Since the recession, previously stable employees decided to fend for themselves. Currently, the Federation of Small Businesses state that we now have 4.9 million small businesses in the UK today. That’s a considerable number, and it’s gone up significantly after the recession.

There are worries, however. The small business is a staple of the economy, but are we risking it turning into a bubble?

We’ve all seen the famous stat that half of all new businesses go bust within three years. Is this going to be the fate of this part of our economy? And what will it mean for young people who want to make a career out of being self-employed?

Optimism and the Economy

Anyone who’s ever seen the stock market knows it’s incredibly volatile. Even the slightest event can completely change the economic prospects of a nation. It also works the other way.

Optimism is liable to increase investment and lead to a greater rate of growth. If people are happy with their lives and have bright futures, they’re liable to spend more. Spending at the consumer level increases business prospects and investment.

With the recovering economy in the UK, optimism has increased. The Financial Times reported on a survey that stated in 2014 one in four small businesses are considering further investment.

At first glance, this would make it appear as if we have nothing to worry about. The economies of the world are fragile, though. They aren’t strong and it won’t take much to knock them down.

What Happens When they Grow?

An economy can only support so many small businesses. Growth isn’t linear. Once a small business grows, it ceases to be a small business.

Once businesses grow, they start to get larger and swallow up the competition. Many larger corporations lost their hold, especially in the retail market. The recession levelled the playing field somewhat.

It’s one of the reasons why small businesses started to grow so quickly. You might have already started your small business.

You always need to look out for what’s going on in your field. A field with little competition now could have lots of it in a year or so. This is where it becomes easy to fall into a trap and be swept away by a more powerful competitor.

Let the Borrowing Begin…

Many businesses see it as a chance to secure investment. It’s true that investment has gotten easier to obtain.

The problem is we’re falling back into old habits. If you borrow for your small business, you need to know that you can pay it back. Another economic recession could mean bankruptcy again.

The U.S. is leading the way in borrowing for small businesses. A report from CNBC demonstrated that it’s up by a further 4%.

What Does it Mean for Career Prospects?

These occurrences within the world of small business open up a whole new world of opportunity for the graduate and the person who wants a change of pace.

Whether you’re starting a small business or looking to join one, this is an industry on the up. It does carry of risk of falling back slightly as the world economy stabilises, but for now it’s an ideal way to take your career.

Should You Consider a Career in Self-Employment?

You should consider a career in small business. Despite the fact that the threats are very real, caution continues to be the order of the day.

Investment is easier to obtain, but it’s not care-free as it was before the recession hit. Even in the midst of an economic slump, a good idea and a well-run business can still become a success.

Image Credit: Flickr user badlyricpolice