Has there ever been a harder time to start a business?
Perhaps a pessimistic note, but with the credit crunch looming big on the agenda, I thought I would pose the question; ‘has there ever been a harder time to start a business?’
A recent article in the Guardian by Deborah Meaden of Dragon’s Den fame talked about business and her experiences. Asked about her outlook for SMEs she suggested that if you’re in business you need to batten down the hatches over the next couple of years and if you’re a start up, you may as well forget about it all together.
This is a little disheartening for me considering that we are still in the startup phase and just over our first year. With 80% of businesses failing within the first year, we’re ahead of the curve, but we have another six months to go before we’re out of the critical 18 months small business startup phase in which most businesses fail. I would imagine in this time of economic uncertainty this percentage would rise.
With small business grants from the Go for it program also disappearing and banks becoming ever more reluctant to lend it also seems that accessing sufficient start-up capital is also a major problem.
Perhaps with the credit crunch less people will leave the security of their jobs to go it alone, but then this may be balanced out by those forced into self-employment by redundancy? So does this mean that this brand of entrepreneurs will be less or more hungry? Who knows, but I would speculate that perhaps those companies who are born and thrive in such economic times will be stronger businesses when they come out the other side.
December 9th, 2008 at 4:26 pm
There’s always a good time to start a business. It’s how you approach cashflow. If you can operate with NO DEBT then you will survice. Though “cash is king” is the current cliche, it’s 100% correct.
People who start small businesses do not always know much about business. They start a business to enable them to profit from a hobby or interest. Business very rarely enters into the equation so the basics of business are missing. The basic theory of business is simple, make profit.
Turnover - Overheads = Profit…. It’s amazing how many business owners don’t get that.
In terms of the current economic situation, in order to make profit you need to look at the overheads, the big numbers are quite basic: rent and employee salaries. So in the last week we’ve seen job cuts from Sony, Yahoo, Google and a bunch of others, they are going for the big numbers.
Perhaps now is not the best time to start a new company, but rather buy a failing one and do something with it.
March 22nd, 2009 at 6:00 pm
If you be successful with a business and come out of this downturn strong you will be 4 times the business when the good run starts