Small businesses are the backbone of the U.S. economy, totaling 33 million nationwide and making up 99.9 percent of all businesses, according to the [U.S. Small Business Administration](https://advocacy.sba.gov/2023/03/07/frequently-asked-questions-about-small-business-2023/#:~:text=Most businesses are small- 99.9,46.4% of private sector employees.). They play a critical role in job creation and economic growth.

Even as small business owners today grapple with rising costs, labor shortages, shifting tariff policies, inflation, and supply chain disruptions, business applications are surging. The U.S. averaged 430,000 new business applications per month in 2024, a 50 percent increase compared to 2019. This trend highlights the resilience of small businesses, the strength of the entrepreneurial spirit, and the enduring dream of starting a business.

To shed light on what it really takes to launch a business, I sat down with my Hello Alice co-founder and small business expert Carolyn Rodz as part of Yahoo Finance show, “The Big Idea.” Together, we broke down three essential steps every entrepreneur should take to turn their dream into a thriving business in this uncertain time.

1. Ensure the market is ready for your business.

The key is to carve out the time to deeply understand the value you’ll provide to your target market. Then you have to figure out how to capitalize. Entrepreneurs have to take calculated risks. Starting a business is challenging, but with the right mindset, preparation, and financial strategy, success is within reach. While small businesses employ nearly half of the American workforce and represent 43.5 percent of gross domestic product, they can have high fail rates and difficulty accessing capital. Keep in mind:

• Is your product or service unique to the market? Answer the problem you are fixing or opportunities you are providing.
• Is there competition that you need to understand in order to dominate? Make a plan to overtake them or partner to launch alongside in the market.
• The time of year matters in marketing. Launch when your customer is active. For example, is there a push for back-to-school shopping, holiday engagement, or tax services?

2. Manage your capital ahead of launching a business.

One of the biggest challenges new entrepreneurs face is financial management. Carolyn and I took a frugal approach when launching Hello Alice. We used credit cards, shared a babysitter, and commuted two hours on public transit to build our company. Here are some of our financial tips for those just starting out:

• You can bootstrap, but remember to avoid excessive debt. While financing is necessary, relying solely on credit cards or personal loans can be risky.
• Explore small business grants. Government and private grants can provide much-needed capital without repayment obligations. In the early days of Hello Alice, we applied for every grant we could find, and that experience shaped our mission. It’s why we’ve made it a priority to raise $8 million in grants and given away more than $57 million in grants through Hello Alice. We know firsthand how much they can mean to a growing business.
• Diversify your capital: The best funding comes from customer receipts. Managing your capital will be your most important role as a CEO, from the day you start until you are a billion dollar company.

3. Find the right time to start your small business.

There’s no perfect moment to start a business. Most small business owners have an existing job, childcare responsibilities, or elder care commitments. Interestingly, the average age of entrepreneurs in America is 45, proving that experience and preparation often lead to success. Whether you’re launching a tech startup or a local bakery, remember:

• Make sure you have the income you need to support your personal life and household. Double-check that your expected earnings in the early days of your business align with your personal budget. Consider starting the company as a side hustle while you have a job and build up from there.
• Insurance is a real consideration. Be certain that you have medical coverage sorted out for you and your loved ones as you get started.
• Time will be tougher than capital. With your current obligations, evaluate whether you can realistically dedicate the time needed to build your business.

In this time of uncertainty, remember that the capital that is least expensive and most reliable is the kind you don’t owe back. In other words, money from grants—or from your customers.

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