Is this the right time to start your business?

Time to Start?

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Writuparna Kakati | 05 Jan, 2009
Is it now the right time to start a business? A tricky question at this moment when a slowdown affecting us all. Well you should believe me, it is right now a great time to start a business. Entrepreneurs, after all, dig out opportunities from everywhere - then why not in a slowdown or even a recession.

Let's consider some success stories that started during different recessionary phases of economy: Walt and Roy Disney started Walt Disney Company during the recession of 1923-24; William (Bill) Hewlett and David (Dave) Packard started Hewlett-Packard Company in a garage during the Great Depression (in 1938); Larry Page and Sergey Brin started Google in 1998 at a friend's garage while the US economy was reeling under effects of dot com bust (1995-2001); Jerry Yang and David Filo started yahoo! in 1995; and finally, 16 of the 30 corporations that make up the Dow Jones industrial average, they all started their businesses during different recessions.

The aforesaid success stories doest not imply that there is a direct cause-and-effect relationship between business success and a recession. But there must be some kind of relation, and it is why so many businesses emerged successfully during some recessions. Now the trillion dollar question is 'How and why these companies succeed despite their starts during such a jaded stage of economy?' Yup, a tough question to answer. Let's delve a little deeper into the subject.

1. What makes a recessions different from other times and how it effects a business start-up? We all know that a recession is not a good time to raise money or find customers but what makes the difference, first of all, is committed start-up. Anyone who starts a business during a recession is most likely to be incredibly committed.

2.Secondly, businesses that start during a recession face a lot of challenges which make them think creatively . When there is a recession, entrepreneurs pay closer attention to their business ideas and leave no stone unturned to ensure that the idea will not end up successfully. Crisis forces business owners to refine their thinking before jumping in.

3. Thirdly, since companies find it far more difficult to raise money during a recession, this results in paying more attention to cash flow, balance sheet, budgets. In addition, it also results in far closer scrutiny in implementation of more intact strategies in terms of marketing, advertising, promotion or any other operational activities.

4.During a recession, labour is discounted among many other things. When there is a recession, unemployment rises as many companies blindly start to striking out employees from the payroll. As a result, it becomes easy for start-ups to get people on the street and pick up some abandoned gems. High wage no longer remain the top priority of with such employees and it provides a cost-effective workforce solution to start-ups. In addition, during a recession it becomes easier to find low cost raw materials, low rent office space and other goods and services.

5. Businesses that start during a recession get a head start. While most of the businesses are facing challenges and cowering down, what could be better time than this to start a business and grab a good market share. Promotion, branding, positioning and all marketing activities become easier during a recession due to lack of competition. Moreover, if a company manages to start during a recession and shapes itself to get through the tough times successfully, it is most likely to be extraordinarily successful when the economy will come out of the recession.

Thus, a recession or economic slowdown does not mean that it is the time for entrepreneurs shelve their ideas and wait and watch. In contrast, it is a great time to start a business and seize opportunity. In the history of businesses, a number of entrepreneurs accepted recessions as a time of opportunity and most of them grabbed extraordinary success. You too can make this trend occur again If you dare to go against the flow and try something different to buck the odds.