Is Now the Time to Start Your Own Business?
"Nothing else in the world... not all the armies... is so powerful as an idea whose time has come." — Victor Hugo
“Timing is everything.” — William Shakespeare
Starting a business is not for the faint of heart. It takes a large investment of money, time, and hard work. Like many other things in life, your chances of success are much better when the timing is right.
So, how will you know if “the time has come” for your idea?
Here are a few things to consider:
Why do you want to start a business?
You would be surprised how many potential business owners can’t respond to this clearly. The time is right when you understand the answer and have put together a plan for the business that shows how it meets your business and your personal goals.
What is your risk profile?
Be honest with yourself about how much risk you can tolerate. Many entrepreneurs fail several times before creating a successful business. You’ll know it’s the right time to start your new venture when you’ve carefully analyzed the risks of the new business idea, and you are comfortable with taking that amount of risk.
What type of business is it, and what will it cost to get started?
Some businesses don’t require a lot of investment and prove themselves relatively quickly. Many service businesses fall into this category. With a good business plan and a solid marketing approach, they can be profitable in less than a year, especially if the business owner is also the service provider.
On the other extreme are businesses that are formed to market a new proprietary product. The investment required is significant, and it is often years before a profit is expected.
Your idea may fall between these two extremes, but remember, it all takes time. I heard recently of a new restaurant that had to wait almost a year for its city permits in order to open. This delay nearly caused the business to fail, because by the time it was able to open, the owners had gone through most of their working capital.
Even if you have already lined up funding or investors, you will need at least some money to get off the ground. If your available funds are tight, wait until it’s clear where the money is going to come from to keep both the business and your personal life afloat.
You’ll know the time is right when your cash flow projections show that you can make it to profitability or a first investment round with the money you have raised to get started.
Remember: Running out of money is the number one reason that good business ideas fail.
What is your family situation?
Starting a business very quickly becomes a 24/7 project. For entrepreneurs without family responsibilities, this is not much of issue, although it means there is no one to support their efforts.
For those with families, it is more complex. You will need your family’s full support to get a business off the ground. Your spouse may need to step in to cover some family obligations for you, and you will need to make sure you set time aside for your family.
The time is right to get started when your entire family is excited about the new venture and committed to seeing it succeed.
What is your education and experience?
We’re all inspired by the stories of young, inexperienced entrepreneurs dropping out of school and ending up on the list of the richest Americans. Unfortunately, most of us don’t fall into this category. Get the education and experience needed before starting your own business. Take your time, work for someone else first, and learn all that you can; then the time will be right to go out on your own.
How unique is your idea?
The most successful businesses offer something new to a market that no one else is serving in quite that same way. If your business idea doesn’t fit this description, you may want to consider revising your product or service so that it is truly an idea whose time has come.
Is there potential competition?
If you’re relying on “first mover advantage,” then you’ll want to get started sooner than later. The previous questions still apply, though — the more you have timing on your side, the sooner you’ll be successful.
When your timing is right, many of the typical roadblocks that startups run into will be easier to navigate. I hope your launch is successful, and your business brings you everything you hoped for!