It’s not uncommon to hear a lot of buzz about the “right time” to start a business. If you listen to the pundits, you will start to believe that there is a magical time that makes a business a success, a sort of “sweet spot.” If you can position yourself in this sweet spot the money will flow into your hands with few problems and your business won’t be one of the ones that ultimately fails.
All of this is, of course, a myth. There is no magical “right time” to start a business. The only real question is when you should start a business.
The economy is never the biggest factor in start-up success!
Before I move on to whether or not you should start a business I feel like I have to beat this drum just a little bit harder. It’s only because I keep reading headlines like, Is Now a Good Time to Start Up a Business?
This is such a bad way of looking at things because it indicates that a new company’s success is governed primarily by external forces. But success is an inside job. Success comes from the combination of the value that you give to your customers, your own attitude, the people that you choose to hire, your sales and marketing skills and your resilience when you run up against challenges.
To be fair, the aforementioned article interviewed lots of different entrepreneurs, and many of them echoed my sentiments here.
James Bishop, founder of cocktail events company Hire the Barman:
“I’m not sure there is ever a right or wrong time to start a business. If you have a strong and considered strategy, a vision to create a disruption in your industry that will grab hold of some market share and you possess the un-relinquishing drive and motivation to make it happen, then it’s the right time for you.”
In fact, I advise you to stop watching the economy altogether. Spend your time hashing out your business plan instead.
You don’t need a lot of money.
Here’s another myth about starting your own business: it takes a ton of money. I’ve heard many people tell me that they’ll launch their business just as soon as they hit some magical amount that will make them feel comfortable taking the risk.
Wells Fargo says that it takes an average of $10,000 to start a small business. That’s a big number, but not an insurmountable one. I’d actually argue that it’s too big.
Spy Chest’s founder started with $3,600. That entrepreneur is now worth $8 million just 13 years later. Forbes listed businesses that you can start for under $1000. Intuit put out an Infographic that says the average cost of a start-up in the United States is actually closer to $325. Tim Ferris of the Four-Hour Workweek wrote about six-figure businesses that started on less than $100. If you haven’t launched your business yet then money is not your obstacle.
Now of course, much depends on the type of business that you are trying to launch. You’re not going to buy a car wash for $3000, and you’re not going to manufacture leather boots on $3000. Obviously you need to write your business plan and really think things through. On the other hand, pre-orders can start selling products before they’re even 100% created, and you probably have more resources than you think you do. Where there is a will there is a way.
There’s never going to be a right time.
Here’s where I give you the bad news. There is never going to be a “right time” to start your business.
Something will always be between you and that perfect time. The water heater will need to be replaced. The car will be in the shop. The kids will need lots of attention. Your credit card bill will keep coming. And you will never, ever know everything you need to know.
The people who start successful businesses and really make it happen are the ones that just start regardless. They stop waiting and they start doing. They let go of their perfectionism and they commit themselves to learning by doing. They learn that getting the job done really well beats the “perfect” job that never happens. Some companies don’t even have their products right when they launch them, and they turn this into an advantage.
Obviously you don’t want to just jump in with an ill-conceived idea. The ball-point pen cozy is never going to take off, for example. There is nothing wrong with, say, running your ideas past a more experienced businessperson to see if there are big holes in your plan.
But if your business is going to meet someone’s real need and solve some real problems and you know how you’re going to get that solution into the hands of people that need it, then you should move forward. Figure out everything else as you go along.
If you do this, you get to do something amazing. You’ll get to make your own economy. It turns out that people are willing to shell out money for the things they need regardless of what the economy appears to be doing. That’s a pretty awesome position to be in, all things considered.
So when should you build a business? How about now? How about today?
Good point with the type of business you’re starting increasing or decreasing the initial required amount of capital needed. Sole proprietorships cost nothing to form, unless you’re registering a DBA, but if you’re going to start with an LLC or corporation, that will add on to your initial costs immediately by sometimes as much as $500, depending on the state. This site (http://www.northwestregisteredagent.com/secretary-of-state.html) has a listing of all fees depending upon entity type. Food for thought, at least.