Starting a Small Business at the Right Time
When you're preparing to start up a small business, you not only need to decide what product and service to sell (and how you’re going to sell it), but you also want to make sure you have the right timing — for the business idea, for you and your family, and for the business environment. If you’re not sure whether now’s the right time to start your business, consider the following:
Fickle fashions: Humans are capricious creatures and what’s hot today may be ice-cold tomorrow. Whether the latest craze is kids going nuts about a Disney action doll or adults getting worked up about a big sporting event, make sure you’re not the one who suffers when everyone gets bored and tired.
Industry trends: The difference between a trend and a craze may seem hard to pick at first, but the difference is both real and important. Be aware of trends in your industry and capitalise on opportunities.
Bleeding edge or cutting edge? You may love being leader of the pack, but there’s no point creating a product or service that customers aren’t ready for yet.
Seasonal variations: If you’re planning a business that is highly seasonal, factor this aspect carefully into your timing when making your business plan. Give yourself time to plan carefully for the peak season so you can take full advantage of that period.
Experience: If you’re looking at buying a nursery, do you have horticulture training as well as hands-on retail experience? If you’re considering going freelance as a consultant, do you have enough consulting experience behind you? Do you have enough experience to plunge into this kind of business?
Capital: Don’t start a business without enough capital behind you. Starting a business with insufficient capital is like competing in a marathon when you didn’t sleep the week before.
Tax reform: Many a good business has been sent to the dogs because of tax reform. Keep your ear to the ground and listen out for these changes within your industry network and via the media, before they happen.
Interest rates: Some businesses are more affected by interest rate fluctuations than others. Importers and exporters, builders, tradespeople and real estate agents are just some of the industries that are affected, as well as any business with large borrowings. If you’re likely to be affected by interest rate changes, look carefully at economic indicators and plan accordingly.
Recessions: Even the most successful business can sometimes have a bad year, or a couple of bad years, especially in times of recession. Such businesses rely on profits built up over previous years to see them through. However, if you start a new business in the middle of a recession, ask yourself whether you’re going to be able to finance it until the good times arrive.