The Best Time to Start a Business

If you ask people the best time to start a business, some people will say you should never start a business when the economy is "bad." Chances are, these "experts" either have never started a business, or they have never been successful in any business of their own.

True, it is harder to start a business when the economy is bad, but the reason you start a business is to be successful. So, when is the best time to start a business? Think about it for a minute.

Let's look a two guys who have the same idea - open a pizza restaurant in a certain neighborhood. Guy "A," Andy, opens now, in a slow economy. He has trouble borrowing money, so he starts small, finds a place when rents are cheap, and works out creative deals with used equipment suppliers, or buys used equipment at auction sale of failed businesses.

Andy gets started, builds his business slowly and is careful with his money. As the economy improves, Andy's business has been growing; he has worked out the kinks in his menus, his service and his quality. He learned how to run a business on a small investment and with low overhead. Andy's Pizza Shop now has a sizeable, loyal following.

Guy "B," Bill, on the other hand, listens to someone who says a bad economy is not the best time to start a business. So, he waits two years for the economy to improve. Borrowed money is easy to find, so he finds a large, expensive location in the neighborhood, buys expensive equipment and opens Bill's Pizza Palace. At first, people flock there to see this new beautiful architectural wonder of a pizza shop.

When the new customers enter the "palace," they are met with high prices, poor quality and inexperienced management. Bill has too much money invested in his frills - fancy location and fancy, expensive equipment. He can't afford to be competitive with Andy because his overhead is too high.

Andy learned how to run the place when money was tight and there weren't many customers. When he made beginner's mistakes, it didn't cost much and not too many people knew about it. Andy has two years of experience and low overhead, while Bill has no experience and a lot of overhead. At this point, who would you bet on to still be in business a year from now? I'd bet on Andy.

Now, what do you think about the best time to start a new business?

By the way, I have seen this type of scenario play out several times, in several ways; fancy restaurants or pizza shops opening and going bust within six months or a year, while smaller shops grow slowly and stay around for years. In fact, I started a small food business in a bad economy. People told me I was making a mistake. By the time the economy improved, my business was so well established that no one was able to open up and successfully compete. Others tried, but failed.

The question still wasn't totally answered, though. When is the best time to start a business? It's now. Now is the best time to start a business. Actually, anytime can be a good time to start a business, provided you have planned it out completely and you don't waste a lot of money. Take your time and learn your business. Be aware that you will make some mistakes at the beginning, but if you can learn from your mistakes, you will be far ahead of anyone who waits for the perfect time or the perfect plan.
by : Meil Weiss