What is the Best time to Start a Business?

Let us begin with examples from real life.  US economy has been in recession for a l

... ong period since year 1851, yet sixteen blue-chip...
What is the Best time to Start a Business?
Manish Khanna Image
Manish Khanna
Wednesday 28th of January 2015

Let us begin with examples from real life. US economy has been in recession for a long period since year 1851, yet sixteen blue-chip companies which are part of DOW 30 were formed during the recession. All major online portals like Facebook, Skype, Twitter and many more such successful startups of today have been founded & formed during flat, bad & recession hit economic times. This might sound strange but is a fact that many successful companies/ startups have born during the tough times.

An obvious reason of this is that venture capital investment is the lowest at these times. That is; much less amount of money is required for a new start up at the time of economy slow down. A few statistics that may prove this point are: In 2000 (Dot com boom era) a new start up needed more than $ 100 billion. By the year 2008, this reduced to $29 billion & further to $23 billion by 2009. It is a proven truth that when economy is skewed investors also look forward to investing in companies that have well designed & thoughtful business plans that are expected to generate revenue in the long run.

One apt example for the start-ups against tides is a company name “HARA” based in Redwood city, CA. This company is owned by Amit Chatterjee, a venture capitalist. Right when the economy had a slogging growth, this entrepreneur was trying to get his green start-up off the ground. He knew that the best time to start a company is when the economy is worst.

Amit is a true example of turning the high tides in his favour. His company provides the best eco-friendly environmental & energy management software to business that lowered their carbon footprint & energy consumption. In less than a year big names like, Aerojet, Coca -cola, etc. were associated this company. In Chatterjee’s words ‘’Venture capitalists gave us extra due diligence, and we had to be singularly focused on providing value to the customer.”

Many businesses like ‘HARA’ parry the economic forces & turn them to their advantage. Many aspects of economic slowdown contribute to this like: labour is cheap due to increasing unemployment, offices are available at cheap rentals, suppliers are open to negotiations, etc. All these aspects reduce overhead costs & thus overall investment in a start-up is lesser. This leads to more efficient use of investment money & enables the entrepreneur to give more attention to the operational aspect. Thus, we can classify the benefits of the recession to a start-up as:

  1. Everything from labour to land; raw material to machinery is cheaper
  2. Talent is available to be hired
  3. Funds available as people are reluctant to invest in the stock exchange
  4. Suppliers give better credit
  5. Get more publicity as rising against the tide

Beyond economic conditions, a new business startup also needs certain experience & maturity. As per Stefan Siegal, a fashion entrepreneur, “one should not start a business immediately after University. A new start-up needs a clear & decisive mind before getting into serious business.” One should have a reason & vision to start a business.

At the same time, for a person working full time in a company but planning to start own business needs need concrete plan & a lot of hard work. They need to set time out every day from their regular day work for their start up, plan earning & budget on a weekly basis.

Having said that, all theories & expert comments kept aside, one school of thought also says that the best time to start a business is NOW! For people who are determined, energetic & committed, right time is now to start a new venture. When you keep thinking about it but never give it a try, it will never happen. One might keep giving reasons to himself like, lack of time, funds or experience, etc. But all these are just excuses till the time you do not try your hands on it.

Internet boom

Internet has changed the meaning of business by altering the way buy & sell market operates. It has not only opened up wide choices for the customers but also given a wide variety & options to new entrepreneurs. Internet boom has created an environment wherein new start-ups can be floated with least associated risk.

With the technology in hand & N number of online portals available anyone can become an entrepreneur. Such start-ups practically require no cost and for them the entire world is a market. Internet has brought all big & small entrepreneurs on the same platform. On the one hand, all big companies have started their functionality online too whereas on the other side businesses that started as a small part time activities with a PC at home have now turned into huge empires spread across geographies.

Customer demands

Another reason to enter the market now as an entrepreneur is that the customers are looking for variety these days. With the internet, the world has opened up for the customers & they are looking for something different every time. They are ready to spend that extra penny to get that ‘something different’. The bigger, the better theory has turned old now! Customers now want a personalized and door step service & lie to know who their seller is.

In todays’ world a business with good websites, known brand that reaches out to the customer & is connected with them has huge chances of growth in the long run.

Off late, customers have shown interest & loyalty towards new start-ups also as they get more attention better deals here. A few examples are online shopping portals like Flipkart, etc. In case you have a different deal to offer, a quality product or service different from what your competitors offer this is the time to start your venture & hit the market.

Author Info
Manish Khanna

Manish is founder of Business2sell Group of Websites. 

Business2Sell.com.au is one of the leading business and franchise for sale listing websites. We work with our business brokers, commercial agents, franchisors and private sellers to help them connect with the right buyers for their opportunities. 

With website now functional in Australia, United States, United Kingdom, Canada, New Zealand and South Africa. We have over 18,000 businesses for sale listed, with over 220 Business Broker and Commercial Agent. 

I have over 20 years of experience in Web Industry; I have been involved in websites industry since the early years of 1996-97. In my professional career I may have worked for over 10,000+ websites. My Specialty is to build portals or complex online applications.

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