For many people, the dream of starting their own business is a lifelong one. However, it is not easy to transform a creative project into a viable economic activity that enables individuals to participate fully in the economy of a country. To do so, the entrepreneur must undertake a long journey that involves taking several steps and procedures that may be quite complex. The first step is to validate the idea in a market study and to determine whether it has a real chance of success. This analysis is a prerequisite to the writing of the business plan.
Once a good business idea has been identified, it is important to determine the costs and benefits of starting it. This step is often overlooked, but it allows for a precise assessment of the potential profitability of the new venture. It also provides the basis for identifying potential obstacles and deciding on strategies for overcoming them.
A number of economists have argued that recessions are a good time to start businesses, because there might be less competition and the prices of inputs such as labor and supplies might be low. However, the actual number of firms that are actually launched in a downturn has not yet been determined, and it is too early to know how many of these will survive and grow.
A significant increase in the rate of new firm creation during the COVID-19 pandemic is certainly welcome, but it will take months to evaluate how many of the expressions of entrepreneurial intent captured by the business applications data actually turn into new (employer) firms that hire workers. The Census Bureau’s Business Dynamics Statistics dataset may provide some clues here, and will allow for the development of a more complete understanding of the phenomenon.