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Is Now a Good Time to Start a Business?
Despite some positive signs, the economy remains on shaky ground. Our Board of Directors explains why that means big opportunity for aspiring entrepreneurs.
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The unemployment rate still stands at nearly 10 percent. The housing market continues to slide. The Dow has had more wild mood swings than the cast of Jersey Shore lately. People can actually explain what a "double-dip recession" is.Which is exactly why now is a great time to start a business.
Sounds crazy, doesn't it? But the reality is, historically, more businesses are started during and after recessions than during periods of prosperity. In fact, some of the most storied companies in U.S. history got their start during turbulent times -- the Walt Disney Company, Microsoft and Apple, just to name a few.
Now you must be asking why. Well, for starters, there's no better revenge after losing your job than starting your own successful company and becoming your own boss. And with millions of people out of work, more than a few are dusting off old business plans and finally putting them into action.
Perhaps more importantly, companies tend to hunker down during a recession -- meaning that entrepreneurs who know how to seize opportunity find themselves with cheaper real estate, an abundance of available talent and weakened competition. That's not to say starting a business is ever easy, and there are certainly reasons to remain cautious right now, but the right idea just might see the light of day at a time like this.
Still not convinced? We asked our Board of Directors -- some of whom got their own starts during recessions -- if now really is a good time to start a business. With a few exceptions, the chorus of "yes" was almost deafening. Here's what they had to say.
Richard Branson
Founder and President, Virgin Group
"I think now is a really good time to start a business because everything's half the price it was two years ago, and therefore the cost base is low. The big companies are struggling and that's the time for the new young entrepreneurs to get in and have a bite at the fat underbellies."
Bob Parsons
Founder and CEO, The Go Daddy Group
"Absolutely. In fact, any time is a good time to start a business -- but when the economy is in a recession, I think that's the best time. The reason? Your efforts will stand out during a recession."
Eric Ryan
Co-Founder and Chief Brand Architect, Method
"It's never good time and its never a bad time to start a business. It's unpredictable how long it will take an entrepreneur to get though the startup cycle, so regardless of the immediate macro (i.e. economic) or personal situation, it will change for better or worse. For example, if the economy is roaring when you start, by the time you have funding or finished writing your plan, there may be a recession, and vice-versa."
Lexy Funk
Co-Founder and CEO, Brooklyn Industries
"I would definitely start a new business now. The recession is an inflexion point. Consumers are thinking differently about the value/price proposition of products and services. There is room for new business models right now and for startups to grow quickly."
Clint Greenleaf
Founder and CEO, Greenleaf Book Group
"It's ALWAYS a good time to start a business -- if you have a good model. The economy isn't as important as what you're doing and if you can make money doing it. There are a ton of stories about companies that started in bust times and a ton of those that started in boom times too. Don't focus on the macro picture. If your business plan and model are solid, you'll do great."
Tate Chalk
Founder and CEO, Nfinity
"The answer is, it DEPENDS. Some aggressive wisdom dictates that the best time to start a business is in a down economy (less competition means an easier way to profitability). I tend to agree, but more than external reasons on whether or not to start a business, I believe that it's the idea and the people behind the idea that make all the difference. So, if you have a) a fantastic idea that is well thought out, b) a great business plan that takes into account that it will cost twice as much as you plan, twice as long as you plan and you will make half as much money as you plan, c) distribution in place before you go to production, then yes, it's a perfect time to start a business! Just remember, an idea never made anyone any money -- only perfect execution of that idea.
Julie Jumonville
Co-Founder and Chief Innovation Officer, UpSpring Baby
"Hell yes it is a good time to start a business. Large companies are cutting services, product lines and personnel. Sure it is hard to get a bank loan, but if you can bootstrap your new venture, there is market share and loyalty to be gained from consumers. In addition, there is an abundance of very talented people who may be in between jobs or would prefer to trade watching The Young and the Restless to work for less in exchange for equity."
Warren Brown
Founder, CakeLove and Love Café
"It's a tough market for small-business retail. What you need is a property owner that views a lease as a partnership and creatively works with the tenant. Fixed costs that strangle cash flow will make it tough going for a startup."
Rob Adams
Director, Texas Venture Labs at the University of Texas
"Yes. At some point in the next year we should emerge from the economic ditch we're in -- and most of your potential competitors probably didn't survive. At the same time, spending will increase as customers invest, replenish and restock all the products and services they scrimped on for the last several years. Now is the time!"
Phil Town
Investor and Author of Rule #1 and Payback Time
"DANGER, DANGER. Consumer businesses are at war competing for fewer and fewer consumer dollars. Investors are getting lots of distressed businesses at discounts. Very tough time to attract angel capital, VC money, lenders and even factoring receivables. If you start a business now, you have to have the capital to get to cash flow on your own. Also, you should have worked in the industry -- and know it and your competition like you know your way home. And you better have a heck of a moat. Some form of protection against competition that gives you monopolistic pricing and margins. And if you don't know what I'm talking about, scoot on home to mama, child, because you aren't ready for this league."
Gary Whitehill
Founder, The Relentless Foundation and New York Entrepreneur Week
"Absolutely. Contrary to what most folks think, adverse and unstable times create incredible opportunities. Some of the most well-known brands that have now become household names were born in unfathomable recessions."
Jennifer Hill
Chairwoman, Astia NYC Advisory Board
"Absolutely! Basic overhead to launch a company continues to get cheaper, good labor is still plentiful and more community resources are available to advise and accelerate entrepreneurs. Companies with desirable products or services who generate revenue and organically grow during a recession are in excellent shape for the future -- especially when raising capital."
Steve Strauss
Columnist and Author of The Small Business Bible
"It's actually a very good time, both in the short run and the long run. Immediately, with the economy on the rebound, with people starting to spend more again, avenues for businesses are opening up. But even more broadly, this is the best time ever to be in business for yourself because there are simply so many amazing tools out there that can help you succeed -- computers, software, website, mobile phones -- it's an amazing time to be an entrepreneur."
Elizabeth Busch, Anne Frey-Mott and Beckie Jankiewicz
Co-Founders, The Event Studio
"Now is a GREAT time to start a business. With crisis comes re-evaluation and opens up the opportunity for new ways of thinking. For us, this means companies are reconsidering both what events can do for their business and how they structure the most efficient (cost and otherwise) team to get them done."
Jodie and Danielle Snyder
Co-Founders, DANNIJO
"We don't believe there is necessarily a bad time to start a business. You just need the right idea and to be able to execute it. We started our company at the start of the recession, and it worked in our favor."
Comments (Page 1 of 2)
Let's see....I don't know what my payroll taxes will be next year, I don't know what healthcare costs will be, I don't know what my capital gains tax will be, I don't know what inpact cap & tax legislation might have on my cost of doing business, I don't know if I may have to hire union workers.....yeah, it's a great time to start a new business (LOL).
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Are you tired of all these scams and business opportunities that are being posted? The internet DOES offer real jobs that you can work as an employee but you just have to know where to find these jobs at NO costs to you. I really do work as an EMPLOYEE for a large internet corporation. Just do a web search for "Best T0P J0Bs" to get a FREE list of hundreds of real work at home jobs offered by well known companies. These jobs DO NOT cost you money and are NOT business opportunities. These are employment positions. This is not a scam. Hope this helps!
lets get rid of the free ride parasites in america.they are sucking her dry.illegals, and certain gov.officials ect.our gov.needs to be cut by 90 percent and taxes also,then we can survive.the way things are now there is no incentive to start a bussiness.
YES if youre a fool and cant see were this country is going.
JUST joking the road is a cliff
One word of caution, make sure you know what you are getting into.
That is why I wrote an eBook : 50 ugly truths of starting your ownbusiness... you can download off my blog for free at www.nosmokeandmirrors.com .
Mark allen roberts
I see the point of these very successful entrepreneurs, which is that it's a good time to start a business because it could be the "inflection point" in the economy. But there is a very disturbing subtext that, I think, is very dangerous for people who want to start a business.
We all know that 95% of the businesses fail in the first five years - something like that. And that was the pre-recession statistic. Also that most of that 5% don't build the kind of business they set wanted to build in the first place. And still, there are 3 words of advise that have always been repeated: "Just Do It." In my opinion, these are very dangerous words of advise for most people wanting to start a business. When I started my first business, I fell for it. Since then, I cringe every time hear these words. Most of us are trained to be employees, not business owners, by schools, colleges and yes, even business schools. It's like a tennis player who has never played tennis and ends up playing the game with a Wimbledon player. We need to know how to build a successful business, not Just Do It, and we need more guidance than business schools or those who say "Just Do It." We need to learn how to build a business by building it.
Bhavesh,
You don't make sense here. You're saying that you need more advice to do something that you can only learn by doing and thus "Just do it" is not good enough... 8-)
It seems to me that to learn to do something perfectly it is by doing it and thus you have to "Just do it". That goes for a lot of things, not just business. And yes, in case of business, you're much more likely to lose a lot of money. So what? It's just money...
Alexis -
What I am saying is that most people don't have the proper training/skills/mindset to "Just Do It."
It's like you have never held a tennis racket in your life and you want to play tennis with a Wimbledon player. Business-building, I believe, is a skill that needs to be mastered by doing, like sports. Getting advise and knowledge is a start and important and helpful, but you can't *implement* that knowledge by "Just Doing It." You need to build your skill in implementing that knowledge in baby-steps.
The "Just Doing It" advise I am referring to is like telling someone who has never boxed before to get into the boxing ring with the heavy weight champion. How long before the knock-out? That's what happens to the 95% of businesses that fail.
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Q: "Is Now a Good Time to Start a Business?"
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A: EVERY DAY is a good time to start a new business, just having the MONEY to do it
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I'm trying to start my new.space company, from two years: newspaceagency.com
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and to develop a low cost computer, from over six months: mylowcostpc.com
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but, I haven't found any funds from VCs, BAs, banks, sponsors or supporters, so, both projects are still on the starting line... :[
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It seemed like most everyone agreed– your success doesn’t depend so much on what is going on externally, but rather whether you have a solid business plan. The truth is, even in the worst of times, people and businesses are still spending money. They are just more careful about what they spend their money on. As long as you are confident about a need for your product in the market, and have a solid plan in place to make your execution impeccable, you will succeed regardless of the economic climate. We sell The “60 Minute Strategic Plan,” a good way to complete an effective business plan quickly. http://www.vistageknowledgecenter.com/60-minute-strategic-plan-by-john-johnson.html
Katie Reynolds
@VistageKC
www.vistageknowledgecenter.com
Best time! I did it...two years unemployeed and all my old clients calling me to complain the company is taking care of them. You bet I stepped up to the plate..took back the clients I sold and now they are happy campers and I have a pay check again. Win Win.... Just find your fellow co-workers who helped build the big Corp. They will be happy to help you build a better mouse trap.
Hello every one. I think right now is a very bad time to start a new biss. Its not like 60 or 50 years ago today. People need to save there money for the big day yet to come. Another country take over. And I really beleave that that is coming soon. Just look what they have done to all the biss companys out there now. With Taxes and Healt care and the peoples 401k and retirements. The goverment runs us all.And will take from all of us when they want. We need a hole inside goverment change or take over.
If you can start a business now and keep it afloat for a year. I think you've done well and will flourish when the economy gets better.
I started a business in 97. It flourished quite well and I followed all the correct rules especially not taking a draw for myself. Of course when the economy went down so did the business since people simply cannot pay for certain things right now. The one thing I do admit not doing is making a good web presence which is this day and age is very necessary. I do not regret starting that business because you do learn from simply doing. It was hard to shut my business after nearly 10 years of business but I did because sometimes that is the wisest thing to do. But never give up! At least that is what I keep telling myself......HA!
It is a great time for direct sales businesses. Most direct sales companies have low-cost start up fees and good ones provide the initial inventory to make your investment back immediately. Direct sales cuts out the middle costs of running a business and therefore provide a greater value to consumers. Owners of direct sales companies make instant money and there is no need to "invent" anything and no employees to deal with. Advertising costs are completely up to the owner, as the best advertisement is simply one's mouth.
Many families are loosing their homes because they are short every month by $300 or less. Only $300 per month would keep MANY American families from loosing their homes. Direct sales business owners decide their own income, working as many or as few hours as they choose-- and around their own priorities!
I am a BeautiControl consultant and my mobile spa treatment business keeps my family, not only afloat-- but affords us things we WANT-- even in this economy.
I would love to help others achieve the financial freedom possible with their own business. Start today for as little as $95. Receive everything you need to have your first SPA direct sales party right away.
Check me out at www.beautipage.com/robingoben
In these tough economic times wouldn’t it be nice to have a “plan B” or better yet, a plan to actually prosper? With the Pre-Paid Legal opportunity, you may be able to not only survive, but thrive in a time when the news of the day revolves around a struggling economy wrought with layoffs and cutbacks.
www.StartYourFreedom.Info
Please !!!!!!!!!!!! We live in a consumer spending based economy and that spending is gone until things improve. PERIOD. Why do think all these companies are downsizing or closing !! All these people recomending its a good time to start a business are like " lemmings", it sounds invesmently (sic) to say its a good time to get into business. Yea, homebuilding sounds good. No credit, no loans, no buyers hummmmm sounds good. hahahahahahahahahaha Please !!!!!!!!!!!!!!!!!!