Why It’s a Good Time to Start Your Own Company

Barb Darrow

<p>Here&#8217;s some good news: For the fourth quarter of 2016, the percentage of new job seekers starting their own businesses is the highest it&#8217;s been in four years, according to <a href="https://www.challengergray.com/press/press-releases/challenger-2016-start-report-entrepreneurship-spikes-q4">new research</a> published by Challenger, Gray, and Christmas.</p><div class="paywall-selector"></div><div class="paywall">
<p>For the quarter ending December 31, 2016, 7.4% of job seekers in the United States started their own businesses. That is up significantly from 4.8% in the fourth quarter of 2015.</p>
<p>For the full 2016 calendar year, 6.1% of this cohort started businesses, the highest annual number since 2009, when 8.6% of these people started businesses.</p>
<p>So why are more fledgling entrepreneurs taking the leap? Partly because credit is cheap, and there appears to be optimism among this group that their new ventures will succeed—or if they don&#8217;t, the would-be founders can re-enter the workforce in traditional jobs, according to the Chicago-based outplacement firm.</p>
<p style="text-align:center"><em><a href="https://fortune.com/getdatasheet/" target="_blank" rel="noopener noreferrer">Get Data Sheet</a>, Fortune’s technology newsletter.</em></p>
<p>These budding entrepreneurs might also see the possibility of an Obamacare repeal and tax reform under President Donald Trump as advantageous to new businesses, according to the researcher.</p>
<p>The research cited Bureau of Labor Statistics (BLS) data showing the number of self-employed people in the U.S. has grown by nearly 150,000 since 2014 to 8,751,000—up from 8,602,000 by the end of 2016.</p>
<p>A large majority (85.7%) of these new founders were over 40 years old.</p>
<p>When asked if some of those entrepreneurs might come from tech startups that failed or cut workers over the last year, John Challenger, chief executive of Challenger, Gray, &amp; Christmas replied that this is probably the case, although there is no data to back that up.</p>
<p>&nbsp;</p>
<figure id="attachment_1" aria-describedby="caption-attachment-1" style="width: 547px" class="wp-caption alignnone"><a href="https://content.fortune.com/wp-content/uploads/2017/02/jobseekers2.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1943389" src="https://content.fortune.com/wp-content/uploads/2017/02/jobseekers2.png" alt="Startup job seekers" width="547" height="366" /></a><figcaption id="caption-attachment-1" class="wp-caption-text"><span class="credit">Challenger, Gray, &amp; Christmas</span></figcaption></figure>
<p>Generally speaking, former tech startup employees are accustomed to the high-risk, high-reward nature of that world and thus likely to try the startup life again, he told <em>Fortune</em>.</p>
<p>On the other hand, those laid off from established big tech companies like Cisco (CSCO), <a href="https://fortune.com/company/ibm/" target="_blank">IBM</a> (IBM), or <a href="https://fortune.com/company/intel/" target="_blank">Intel</a> (INTC) might be less likely to go the startup route. Last week, Challenger&#8217;s firm reported that U.S. tech companies in aggregate <a href="https://fortune.com/2017/02/16/tech-jobs-layoffs-microsoft-intel/">lost more than 96,000</a> jobs via layoffs last year, compared to about 79,000 in 2016.</p>
<p style="text-align:center"><em>For more on startups, watch</em>: <div class="vodvideocontainer" style="position: relative; padding-bottom: 56.25%;"><iframe src="//fortune.com/videos/embed/54827de8-6061-4255-8f9b-6a1eecd448c4" style="position: absolute; top: 0; left: 0; width: 100%; height: 100%; overflow: hidden;" scrolling="no" frameborder="0" allowfullscreen></iframe></div></p>
<p>The overall good news here, in his view, is that the number of new jobs being created by newbie companies helps offset the number of jobs lost through layoffs, which is why the national unemployment rate is so low.</p>
<p>As of January, <a href="https://data.bls.gov/timeseries/LNS14000000">that rate was 4.8%</a>, down from 4.9% the previous month, according to the BLS.</p></div>

2017 is shaping up to be a great year to start a business, according to Challenger, Gray, &amp; Christmas

More Entrepreneurs Launching Startups in 2017 Than Last 4 Years: Study

Businessman sitting at desk working on computer

legacy

Tech

Entrepreneurs have a case of startup fever.

Why It's a Good Time to Start Your Own Company

2017 is shaping up to be a great year to start a business, according to Challenger, Gray, & Christmas

More Entrepreneurs Launching Startups in 2017 Than Last 4 Years: Study | Fortune

Paolo Confino

Here’s when AI will launch a decade-long cycle of economic growth and productivity gains

/2025/03/14/ai-labor-market-unemployment-jobs-hiring-goldman-sachs-productivity/

Christiaan Hetzner

Tesla CEO Elon Musk introduces the newly unveiled Cybertruck in 2019.

Elon Musk’s Tesla reportedly halts Cybertruck deliveries as owners complain of metal sides falling off

/2025/03/14/elon-musk-tesla-cybertruck-delivery-halt-owners-complain-of-metal-sides-falling-off/

Preston Fore

Nvidia surpasses Tesla as the No. 1 held stock on Robinhood, fueled by Gen Z interest

/2025/03/14/nvidia-stock-gen-z-investment-robinhood/

Chris Morris

Facebook ramps up TikTok battle by letting creators monetize their Stories

/2025/03/14/facebook-creators-monetization/

Elon Musk arrives for US President Donald Trump's address to a joint session of Congress

Tesla may have no new car coming after all as report reveals plan to launch a stripped down Model Y 

/2025/03/14/elon-musk-tesla-may-have-no-new-car-coming-after-all-model-y/

Beatrice Nolan

Elon Musk and Donald Trump stand in front of a red Tesla outside the White House

Tesla warns White House over tariffs in unsigned letter: ‘It’s a polite way to say that the bipolar tariff regime is screwing over Tesla’

/2025/03/14/tesla-warns-trump-administration-tariffs-company-exposed-retaliation/

Eleanor Pringle

If you think the current outlook is bad, just wait until the White House can't find anyone to buy its debt, warns Ray Dalio

https://fortune.com/2025/03/12/national-debt-burden-ray-dalio-foreign-government-pressure/?itm_source=parsely-api

The Associated Press

She became a billionaire overnight after years as a hospice nurse. Now a philanthropist, she is challenging America’s richest 'to redistribute’ their wealth

https://fortune.com/article/billionaire-overnight-philanthropist-challenging-america-richest-redistribute-wealth/?itm_source=parsely-api

Marco Quiroz-Gutierrez

Tesla is getting pummeled in the stock market, but Elon Musk's other companies are having a field day in the secondary market—especially xAI

https://fortune.com/2025/03/14/elon-musk-private-company-valuations-soar-tesla-stock-falls/?itm_source=parsely-api

DOGE says it's saved the federal government $115 billion. Experts say the figures don't stack up.

https://fortune.com/2025/03/13/doge-saved-federal-government-115-billion-experts-doubt-figures-elon-musk/?itm_source=parsely-api

Sasha Rogelberg

After repeated claims of taking over Greenland, the Trump administration is now asking Denmark for extra eggs amid shortage

https://fortune.com/2025/03/14/egg-supply-denmark-exports-usda-trump-adminstration-greenland-annex-threats/?itm_source=parsely-api

Jessica Mathews

In a striking change of tone, Tesla mega bull Dan Ives warns Elon Musk that patience is ‘wearing thin’

https://fortune.com/2025/03/11/tesla-bull-wedbush-dan-ives-change-of-tone-warns-elon-musk-patience-wearing-thin/?itm_source=parsely-api