Believe it or not, the end of the year is a good time to begin the process of starting a business. Contrary to what most would think there are solid reasons to get the ball moving on your new business idea and iron out wrinkles before the new year.
According to Guidant Financial, a leader in small business financing, there are big benefits to getting started on a business ownership journey before the New Year. “People often assume that it is a good idea to wait until the beginning of the year to start a new business, when in fact there are clear advantages to starting [later in the year]. Each year we are able to assist entrepreneurs in December, making real differences in helping them achieve success with their new business moving forward,” said David Nilssen, CEO of Guidant Financial.
Here’s a look at the top 7 reasons why pursuing business ownership later in the year is a good idea.
1. 401(k)s are at their highest annual value at year’s end
Planning to tap into your 401k to finance your dream? The market is moving into a period often referred to the “Santa Claus rally,” when 401(k)s may be near their highest annual value. Even with taking into account the recent volatile market activity, it remains near all-time highs. If using your retirement funds to buy a business 401(k) business financing is of interest, the end of the year may be the best time to get started if you want to make the most of the funds in your nest egg.
2. Interest rates are still affordable
SBA loans continue to be an extremely affordable way for business owners to secure capital, with prime interest rates just over 5 percent. Even with rate hikes this year, rates haven’t been this low since the 1950s. In fact, Guidant’s been averaging a 96 percent closing rate on SBA loans while big banks average only 23 percent.
3. Business brokers and sellers are more motivated to make a deal
If you’re interested in buying an existing business, now may be the best time to negotiate a deal. Many entrepreneurs who sell their businesses around the holidays are hoping to close their books by the end of the year. If you are able to move quickly and close the deal, the seller may be willing to lower the price or offer other perks.
4. Iron out wrinkles before the new year
Few small businesses experience immediate success when they open their doors. It takes time to make sure processes run smoothly and to generate the kind of consumer interest that will translate into sales. But if you can open a business at the end of the year, use the days and months leading up to the new year to take care of any front-end logistics, so business is fully operational by the time the ball drops.
5. Beat the paperwork rush
In order to become a legitimate small business owner, you need to file documentation with local and state government (things like business licenses, permits, tax IDs, etc.). By completing these forms before the turn of a new year and filing them sooner rather than later, you’ll not only avoid having to deal with government office closures during the holiday season, but you will beat the rush that inevitably comes as people try to get things filed before the end of the year.
6. Take advantage of end-of-year savings
It’s not just consumers who can benefit from the many sales and coupons offered this time of year. As stores prepare to clear inventory, you can save on office supplies, office furniture, and other startup expenses for your new business.
7. Cash in on holiday revenue
The surge in spending that accompanies the holiday season makes it the perfect time for a new business to increase its sales potential. This continues to be true in 2018, with Deloitte predicting holiday sales at $1.10 trillion, growing 5 and 5.6 percent from last year. If it’s a matter of deciding when to open the doors, consider doing so in November or December to take advantage of those boosted profit margins. Another possibility is hosting a soft opening in December and celebrating a grand opening after the new year has rung in.
When you’re ready to take advantage of these benefits and start the entrepreneurial journey, securing business financing should be the first step. Similar to buying a home, getting pre-qualified early in the process allows you to scope out the perfect business that fits your budget and lifestyle.
Headquartered in Bellevue, WA Guidant Financial helps business owners secure financing to start, buy or grow a business. An industry leader in business and franchise financing, Guidant works with new and existing entrepreneurs to identify, evaluate and deploy customized financing solutions. Their services include, but are not limited to, 401(k) business funding, SBA loans, unsecured credit, and portfolio loans. In total, Guidant has helped over 20,000 entrepreneurs in all 50 states to invest more than $4 billion in funds to start small businesses, resulting in more than 85,000 U.S. jobs created. Visit Guidant on the web at guidantfinancial.com.