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Startup & Small Business Outlook 2018

Do you a have a startup fever? Are you wondering if it would be a success or not? Then, have a look at the Startup Outlook of the year 2018. This year has come up with a considerable rise in the number of successful startups and various other opportunities in every era of the technology if compared to the statistics of the previous years.

The mania for expanding startup ecosystems has driven several jobs opportunities, innovations, productivity, and rise in economic growth. The Silicon Valley Bank has shared a detailed statistics report for Startup Outlook 2018 concluding the perspectives of approximately 1,000 startup companies (mainly technology and healthcare founders).

Small Business Outlook 2018

As per the survey, 95% of startups out of 100 shared their outlook on business conditions and stated that it is either consistent or have been improved (for the maximum of startups) as compared to the previous year.

Here are the insights of the Startup Outlook 2018, which will help you to identify the scope of a startup by the perspective of successful technology and healthcare leaders of the business world:

Fundraising Environment

A positive and optimistic signal for entering a startup with confidence has been received from the current fundraising environment. As per the study, out of 100, 69% of startups have successfully raised capital for their business, whereas 12% does not find the funds raising challenging anymore.

Based on the recent study, about 51% of the startups were raising funds successfully from the venture capitalists in the year 2017 and now increased to 54% by the year 2018, which encourages and sustains the small companies to expand without having access to equities markets.

Rest of the startups are still raising funds through the bank debts, IPO(Initial Public Offering), crowdfunding, government grants, ICOs (Initial Coin Offerings) and so on. While forecasting the future scenario of the fundraising environment, more and more startups will mostly head toward the venture capitalists.

Mergers and Acquisitions

According to the Startups assessments, everyone expects M&A(Merger and Acquisitions) to remain robust.

M&As are also considered as a backup plan to be executed when a startup goes out-of-place. Thus, the business exit plan should be part of a business startup strategy (to be analyzed at the initial stages of creating a business plan).

It requires a professional team for the due diligence, tech-savvy’s, advisors, marketers, valuation experts and much more to help you determine the true worth of your business, which is required for the M&A.

More than 90% of startups have stated that there are chances that the M&A in 2018 will rise in number(more than 50% hike) as compared to the year 2017.

Workforce Valuation

As per the startup assessment report, in the year 2018, the hiring outlook has represented more than 80% increase in the workforce reflecting the successful growth of the startups.

To realize this drastic growth, let’s take the help of the survey report (including the survival rate of the business) proclaimed by the Bureau of Labour Statistics. The study says that about 80% of the small business survived their first year, which started reducing by every proceeding year i.e.70% in second, 50% in fifth and finally reached 30% by the tenth year along with the employees.

This data is persistent from many years (80%,70%,50%,30% business survival rate across the 1st, 2nd, 5th and 10th year) but with the advent of the technologies, startup outlook report of the year 2018 has represented a remarkable growth in the workforce and forecasted the efficient survival rate in the upcoming years.

Moreover, only 1% of the startups, which were part of the survey stated that they are planning to cut their workforces.

Talent Hunting

Most of the respondents of the survey have shown the disappointment when asked about the challenges any startup might face during the hiring process.

As in the year 2018, about 91% of the startups are still facing the talent crunch. Since every second person is getting graduated in the field of science, technology, engineering, and mathematics there is a shortage of the data scientists, which is much in demand as per the rising trends and technologies.

And the startups are not able to find the skilled workers to grow their businesses. The startup ecosystem requires to figure out the significant ways to promote more technical talent.

Outlook the Challenges For Women Entrepreneurs, 2018

As per the study, there are very fewer chances of growth for the women in tech leadership as of the year 2018. Since 97 out of 100 startups have no women in positions like executives and leaders despite the significant growth among US startups.

Women Entrepreneurs

When compared with the previous year statistics, it has been figured out that the percentage of the number of women in the leadership positions have only been raised from 25 % to 41%, surveyed recently, which is again very less in number.

Intensified Access For Technical Talent

In this year’s survey, the demand for the technical talent has made it difficult for small business startups to compete since it has driven the salaries. Thus, access to talent (affected 64% startups) is one of the the most important public policy issues along with the prevalent issues like health care costs(affected 42%) ,cybersecurity(39%), consumer privacy(28%), corporate taxes(25%) and Patent litigation(23%).

Offshore Operations

US policy drives some operations offshore, based on the fact that the success of the innovations is dependent upon the capability to attract the world’s best and brightest. Thus, approximately 30 % of US startups locates at the critical divisions of their operations. It is also impacted by the immigration policy, tax policy or the regulatory environment.

USA Offshore Operations

Because of the US immigration policy, one-third of the startups have located their facilities (Nonsale operations) outside the US and it ranges from pre-revenue to more than $25 million in terms of annual revenue. The innovation economy is deeply affected by US immigration policy and at least one founder is an immigrant.

To be more precise, the company’s decision to establish facilities or hire employees outside the US, for operational non-sales activities are affected by US laws and regulations materially, about 46% by the US immigration policy, 28% have moved operations offshore because of the tax policy, and approx. 26% moved because of the regulatory environment.

The conclusion of the Startup Outlook 2018

The takeaway from the Startup Outlook 2018 is that this year has driven numerous opportunities to build a viable business model for many startups. As reported by SVP, arranging funds for the startups have become more accessible than the previous years. This much ease in fundraising has made the year 2018 more promising for starting a new business.

The most traditional avenue system for raising funds is via venture capitalists. Regardless, of the popularity of Initial Coin Offerings, startups consider the venture capitalists as a top funding source. Another great news is that the innovation economy has now started giving acceptance to almost all startup ideas.

But the top strain on fledgling startups is unearthing the right talent, due to the rise in STEM structure type of education system there has become a shortage for the data scientists or the technical talent.

Small business finds the talent crunch more challenging than any other issue since the large companies acquire the brightest by the driving the salaries, as well as because of the healthcare costs and cybersecurity risks.

The startups 2018 are putting forth the concerted efforts to place women in leading and executive roles. It is because from the past many years the majority of startups does not have any women in the team of directors(leading positions). This is helping them to diversify their startup.

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After the talent crunch, another aspect of dealing with is the US regulation policy due to which startup founders are moving their operations outside of the US. Thus, on average,there is at least one immigrant among the founding team.

The startups are hiring at the record rates, by searching the fresh talents, yet there is a great demand of the skillful people who can meet up with the business technical expectations.

This startup outlook 2018, has covered almost everything required for a startup in today’s world and helped to provide an outlook to the business conditions. Choose a classic business idea and structure from the ample opportunities and enter your startup with the confidence of getting successful.

Once you are ready with your startup plan let IncParadise help you for incorporating and registering your dream business. To know more, contact us now!

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