Pros and Cons of Starting a Company in Today’s Market

Free «Pros and Cons of Starting a Company in Today’s Market» Essay Sample


Starting a company is a huge step and the beginning of a different lifestyle due to its inherent advantages. However, this can be a gamble given the uncertainty of today’s economy. It is therefore vital to understand benefits and challenges that come with operating the company. Running a successful firm requires skills, determination and the understanding of pertinent business principles. A business can also affect the economy through job creation, which is a positive contribution to the national income. The paper will analyze pros and cons of starting a company in today’s market, as well as how this may influence the economy. It will also culminate in the explanation of governmental and personal strategies towards the issue.

Description of the Economic Issue

Starting a business offers job security because the owner will not have to worry about being fired or laid off (Hirota 11). It is a major advantage because most companies today resort to firing workers in the quest of cutting costs. After all, the U.S. economy is premised on confidence and a free enterprise system, which is powerful and promising. It can be beneficial for someone who finds a market niche and uses his or her creativity to generate income. Similarly, starting a company offers an opportunity to utilize skills or talent and earn from it as opposed to making money for someone. It can be rewarding making the business highly profitable. Besides, one has the prerogative of either making organizational decisions or hiring competent people to do this for the company (Hansen 377).

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Starting a company also has some inherent drawbacks. For instance, the owner is bound to experience a financial risk, the magnitude of which depends on how well the one can manage the firm and the prevailing economic volatility. In fact, some companies go out of business and cause owners to lose their initial investments. Moreover, the firm will experience the pressure of having to add value towards the global supply chain of goods and services. Otherwise it will not stay in business for long. Besides, since many companies emerge today, there is a threat of cutthroat competition since every business strives to attain a competitive edge. Moreover, some corporations are not taxed equitably because tax codes may favor some activities as well as investments for others.

Description of How the Issue Affects the U.S. Economy

Starting a company in today’s U.S. market will generate wealth, employment and greater earnings, all of which contribute to an increase in the national income. It is because there will be greater tax revenue and government spending that can be invested in human capital. In addition, starting a company increases the competition level, which benefits the U.S. economy (Hansen 376). It is attributable to the fact that having more players in an industry will compel the existing firms to re-evaluate their strategies enhancing value addition. As a result, consumers will access better products and services. Besides, it reduces the likelihood of monopolies and oligopolies. However, even though the emergence of several companies can cause saturation, most entrepreneurs will be driven to seek new markets. It also has a positive impact on the U.S. economy. Starting a company also improves economic freedom because consumers reduce their dependence on obsolete systems and technologies.

Government Strategies towards the Issue

Starting a company in today’s economy has several advantages, and it would only be fair if the U.S government made it easier to start companies. In this regard, the authorities can make it easy to navigate the licensing and permitting system (Ferran and Ho 42). For example, the company licensing protocol should be digitized cutting down superfluous costs and processes. Its impact is that entrepreneurs will not have to walk from one government office to another seeking for necessary documentation saving time and avoiding hassle. It will also encourage more businesses to venture in start-ups. The ease of documentation will affect the issue of starting up a company in today’s market by increasing the number of new firms due to the reduction of time and processes. Another strategy is making it easier to access capital to finance businesses. Its impact is that investors will easily access financial resources necessary to materialize their business ideas promoting economic activity (Ferran and Ho 42). It will make it easier to start a company in today’s economy due to the ease of accessing capital finance.

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Personal Strategies towards the Issue

An appropriate strategy is altering the federal funds target rate to manipulate and reduce interests. The impact is that it will increase investment borrowing, which encourages businesses to expand while consumers experience a temporary rise in the discretionary income. It will affect start-ups since investors will be enticed to take up loans to invest in various sectors leading to the appearance of new companies. Another strategy is the provision of tax incentives that encapsulate preferences and tax exclusions. The former are ideally provided to certain types of businesses in the quest of boosting a particular market share. It will encourage investors to venture in different industries and take advantage of incentives due to higher net profits. As a result, it promotes economic growth and development. It will affect company start-ups since it will lead to the start of more companies because investors take advantage of tax exclusions resulting in higher returns.

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There are unique benefits and opportunities that an entrepreneur can enjoy by starting a company today. However, investors and start-ups should analyze the business environment and find out what suits their business since they weigh benefits and opportunities. In the future, the implementation of governmental and personal strategies will be crucial in enhancing economic growth. Some methods can guarantee more efficacy than others. The decision on which one can be effective will depend on the prevailing market conditions as well as the desired objective. After all, start-ups have a positive impact on the economy by providing jobs and increasing competition. For this reason, there has to be the implementation of strategies discussed above because every government ultimately aims at fostering economic growth and reducing unemployment.