The year ahead could be a banner year for entrepreneurs.
With a robust economy, a thriving job market and new tax laws that give small businesses a boost, entrepreneurs have many factors working in their favor.
The Tax Cuts and Jobs Act (TCJA), which was signed into law in December 2017, stands out as the most significant overhaul of the American tax system in decades. The TCJA allows many owners of small proprietorships, trusts and S corporations to deduct 20% of their qualified business income.
While many facets of the TCJA remained hazy for small business owners last year, the Trump administration recently set final rules for new business tax deductions.
These rules make some changes from last year’s proposed regulations, which will help business owners determine what income qualifies for the deduction. No matter how you file, though, the tax plan brings an abundance of new deductions, tax credits and tools that entrepreneurs can use to reduce their tax burden.
If you’re contemplating launching a business in 2019, here’s a look at some of the biggest entrepreneurship trends to watch for in the year ahead.
Entrepreneurship trend No. 1: Entrepreneurship grows in diversity
There’s no one-size-fits-all in the start-up world. Diversity continues to rise in terms of gender, ethnicity, age range and education among those who start new businesses.
For example, women started 1,821 new U.S. businesses every day and owned nearly half (40%) of all small businesses in 2018, according to American Express’ State of Women-Owned Businesses Report.
Minority business ownership has also skyrocketed in recent years. Last year, 45% of small business owners were part of a minority ethnic group. In 2015, minority business owners comprised just 15% of entrepreneurs. The biggest boom is occurring among African American business owners. This segment grew 400% from 2017-2018. At 14%, Hispanics make up the next largest group of minority entrepreneurs.
Entrepreneurs also span the age spectrum, with the average start-up founder around age 42, according to MIT. When it comes to education, you don’t necessarily need an advanced degree to achieve success. Entrepreneurs without a four-year degree outnumber those with a bachelor’s degree or higher, according to a CNBC/SurveyMonkey poll.
The playing field will only continue to level in 2019 for all entrepreneurs.
Entrepreneurship trend No. 2: A focus on long-term success
Entrepreneurs might hustle every day, but they are increasingly more interested in creating a strategy for future profitability than striving for explosive growth right from the start. It’s no longer a priority to grow as quickly as possible.
One in five companies fail in the first year and only about half survive through their fifth year. Entrepreneurs want to do everything they can to foster the success of their new business. They realize that to be successful, they must drive revenue from the very beginning.
Entrepreneurs look at cities with thriving start-up scenes, create a business model to drive their efforts, invest in marketing their companies, know their target market and competition, and ensure they have the right team in place to make their vision a reality. Nearly a quarter (23%) of entrepreneurs say an inappropriate team led to their start-up’s failure, according to CB Insights.
Watch for entrepreneurs to take a pragmatic approach to launching and growing their businesses in the year ahead.
Entrepreneurship trend No. 3: A rise in social responsibility
Entrepreneurs recognize that they can gain a business edge when they aim to deliver social and environmental benefits along with exceptional products and services.
A Cone Communications report reveals that 87% of consumers would buy from a company that supports the causes that matter to them. Three-quarters would refuse to buy a product from companies that support issues contrary to their beliefs.
Whether your new business strives to support local education or commits to beautifying your community, choose a cause and be vocal about it.
Consider TOMS, for example. The shoe company differentiates itself and makes a difference in the world through its “One For One” business model, which donates a pair of shoes to an impoverished child for each pair of shoes it sells.
According to a PwC report, committing to running a socially responsible company might even help you attract better candidates. Millennials, who will comprise 75% of the workforce by 2025, want to work for employers with a strong social purpose. More than half (64%) of Millennials will pass up on a job if the company doesn’t have strong corporate responsibility practices.
Entrepreneurship trend No. 4: Niche markets come to the forefront
Gone are the days of selling a wide array of products to a massive swath of consumers.
In 2019, entrepreneurs can maximize their chances of success by selling niche products and services to a highly targeted audience.
Selling to niche markets allows for more cost-effective marketing since you’re targeting a particular audience rather than marketing to the masses. Since you know who you want to reach, you won’t waste money and time promoting your offerings in the wrong places and to the wrong people.
By selling to a niche market, entrepreneurs can also build a stronger brand by providing more personalized content and customer experiences. This pays off with stronger brand loyalty. When you achieve a 5% increase in customer retention, you can boost your profits 25-95%.
If you know what niche products you want to sell, search keywords online to determine a product’s popularity. Try searching different keywords on Google to find out what existing sellers are doing to achieve success and how they engage with customers.
According to ecomdash.com, some of the hottest niche markets in 2019 include subscription boxes, equipment for high-intensity interval training and personalized planners and journals.
Now’s a prime time to pursue your passion
While launching a new business inevitably comes with some uncertainty, running and growing a start-up is easier and more affordable than in the past.
From small business apps that allow you to synchronize systems and streamline tasks to small business loan approval rates reaching record highs, you can take advantage of the current business environment and emerging technologies to get your business up and running.
This year’s entrepreneurship trends indicate that 2019 offers plenty of promise for those brave enough to make the leap.