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Q: For the past four months, I have been trying to start a marketing and consulting firm. I have spent a lot of time researching competitors, possible operation costs, and marketing tips. One thing I am not so sure about is the economy.
–D. Stone, Via the Internet
A: I personally don’t believe there is a “good” or “bad” time to start a business. Even though the economy remains sluggish, if you’ve done your homework, have a solid business idea and plan in place, and the necessary financing, it’s a good time to launch your business. Besides, with all the uncertainty and political turmoil, timing the economy to find a “good” time to start a business is pretty much impossible.
One thing I would stress, however, is to have enough operating capital for several months. If it costs $10,000 to launch your business, don’t quit your day job once you have that much saved up. Do a cash flow analysis and calculate your monthly expenditures, such as rent, utilities, and supplies, to ensure that you can cover your expenses for several months.
One of the advantages of starting a business in an economic downturn is that building space and equipment can be cheaper and fees for certain products or services that are usually nonnegotiable are open for discussion.
Remember that the economy is cyclical. Upturns and downturns occur every decade or so. Although there are signs that provide clues to where the economy is headed, it’s impossible to predict turnarounds with absolute certainty. So, the bottom line is to not allow the economy to get in the way of your entrepreneurial dreams.