Is there a good time to set up a business?

May 8, 2009

It may come as a surprise but even in the current difficult economic environment there are some very successful businesses. This is not to say that many businesses are facing loss of market and even worse but not all are. A point I make to every pre-enterprise (start your own business course) I deliver is that five businesses can start the same business in the same area at the same time and one will succeed and the other four may fail. The reason for this is that one business will figure out their market and what their clients want and, more importantly, how they want it. Thus, running a successful business, especially from start up, requires getting to know your market quickly. So, if you are thinking about starting up your own business here is the first real mistake to avoid. Many people starting a business are too wrapped up in their own issues: their products, their services, their pricing etc and whereas these are important to the new business they are NOT important to the market. Your customers are only interested in what benefit they can get from your products and services. So think about what your products/services can do for your customers but also, very importantly, how do your customers want to buy the products and services you supply. Think about your business from your customers point of view.

Another aspect of when to set up a business relates to what I call push and pull forces. Push forces are things forcing you to set up on your own. These might be unhappiness at your current position or role with your current employer, lack of enthusiasm about your current circumstances or the like. Pull forces are those which drive you to become self employed. These are the ‘I want to this for myself’, or the ‘I can do better than the rest at this’, or ‘I always wanted to do it for myself’ issues. Over time there exists a balance between these push and pull forces and at different times the balance may change. So if your comfort zone is too large the forces will not be strong enough to compel you to move. But at certain times the attractiveness of self employment becomes stronger and initiates change. Also bear in mind that after several years of self employment you may wish to make a change in the opposite direction. I was self employed for seven years and closed my business as I wasn’t enjoying what I was doing and had a better, more challenging opportunity in employment offered to me.

So there is no simple answer to whether it is a good time to set up a business, the question may be is it a good time for you to set up a business and secondly, is it a good time for your market. If I was to give some advice it would be do not spend money on starting a business until you have clearly worked through all the implications of this very big step. Thus, do not start your business until you have done a business plan (a subject I will come back to in future comments). To help you write a business plan do a start your own business course. These are run by many public and local development bodies, as evening courses or through private training companies. They will probably be run over twenty hours or so (two hours per week over ten weeks for example). You will be challenged and forced to both ask and answer the awkward questions relating to your business idea and you should be able to leave the programme with a better understanding of what you are getting involved with. Do not just jump in and invest money without doing the initial planning, it is usually a recipe for disaster.

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