Franchise Buyers Undeterred by Virus Headwinds in April Small Business Startup Sentiment Index™
Starting a business amid economic uncertainty requires vision, careful planning and, perhaps most of all, guts. Data collected the week of April 14, 2020, for the FranchiseInsights.com Small Business Startup Sentiment Index™ reveals that 52.5% of aspiring owners are actually more likely to start a business now than they were three months ago, despite no clear indication of when the coronavirus impact will begin to subside. Only 16.7% reported they were less likely or much less likely now.
It is not unusual for entrepreneurs to display opportunism during periods of economic tumult. Numerous successful companies were formed during dark times: Walt Disney Productions in 1929 at the onset of the Great Depression; Microsoft and Apple, both near the end of the 1975 recession; and more recently Warby Parker, the direct-to-consumer online eyeglass retailer, in the thick of the Great Recession in 2010.
Is Now a Good Time to Start a Business?
Almost 57% agree or strongly agree that “now is a good time.” For context, this may be explained by the time horizon for the search process — 49.2% of respondents expect to start a business within the next three months, and another 14.2% within four to six months.
Business Outlook for Three Months from Now
Respondents are optimistic about business conditions three months ahead, roughly coincident with their expected time to start their businesses.
Covid-19 Impact on Startup Decision
The responses continue to reflect undaunted entrepreneurial spirit, as 10.7% report “no impact” and 26% report that the coronavirus disruptions actually increase the desire to control their destinies through business ownership. Only 16% of the respondents indicate plans to put their business startup search on hold. Presumably due to the recent tumult in the financial markets, 28.7% of the respondents reported that they had less capital to invest at this time.
Access to Funding
Almost 40% of aspiring owners identified funding or access to credit as a key factor in their decision to start a business. Their outlook regarding the funding climate in three months was murky, with only 26.7% expecting it to be easier to secure startup funding.
The Small Business Startup Sentiment Index™ is based on a monthly survey of individuals who have recently inquired about businesses or franchises for sale on the digital assets of FranchiseVentures.
FranchiseVentures is the leading demand generation platform for potential franchisees to thousands of growing franchise systems in the United States and Canada. Its franchise lead-generation businesses include Franchise.com, Franchise Solutions, Franchise Gator, Franchise Opportunities, Franchise For Sale, and BusinessBroker.net, and together they provide the largest aggregation of prospective franchise buyers in the U.S.
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Published on Thursday, April 30th, 2020.