Starting a Business NOW: Insights & Strategies

I’m frequently asked whether it’s a favorable time to start a business. In response to this question, I believe there are two perspectives to consider.

Firstly, I approach the answer from the standpoint of the individual inquiring. It’s crucial to assess their suitability for business ownership by asking them relevant questions, irrespective of the current global circumstances.

I inquire about their motivations for starting a business and encourage them to share their goals, experience, and skill set with me. Subsequently, I delve into their available capital, potential for securing additional funding, tolerance for risk, and whether they are replacing their primary source of income. Additionally, I explore if they plan to have a business partner.

These questions help determine if the person is well-suited for business ownership and if the current timing aligns with their circumstances. Once we understand their personal aspects, we can better evaluate their readiness to embark on a business venture in the midst of financial challenges and economic uncertainty.

When considering starting a business today, it is essential to keep the following factors in mind:

1. Grasp the prevailing issues: In challenging times, it is crucial to understand the problems people face. By identifying solutions to these problems, one can determine the type of products or services that will thrive in the market. For instance, the continued demand for take-out and delivery of food indicates an opportune moment to establish a business catering to these needs. It becomes even more advantageous if the business offers a unique twist that sets it apart from others.
2. Embrace simplicity and efficiency: Optimal efficiency is key, particularly during difficult times. Businesses that require minimal space and have a small staff can significantly enhance profitability even in unfavorable conditions. As an example, a brand for which I am Chief Franchise Officer, Pepperoni’s in Houston, TX, successfully opened a location in a former Fotomat booth several years prior to the pandemic. Due to the limited 800 or so square feet space, they focused exclusively on take-out and delivery services, resulting in substantial revenue and double-digit year-over-year growth for the past four years.
3. Understand the competition and find a niche: It is crucial to comprehend the existing competition within an industry segment to identify a unique market niche. Customers are already familiar with certain products or services, so finding a way to deliver them more conveniently can give a new business a competitive advantage. Pepperoni’s, for instance, thrived amidst popular industry giants such as Pizza Hut, Domino’s, and Papa John’s by offering a distinctive value proposition.

Now, let’s shift our focus to the current business environment and the benefits of starting a business when the market has fewer openings.

1. Cost-effective opportunities: Commencing a business today can be cost-effective by acquiring used equipment and furnishings. With numerous businesses having closed due to poor preparation, insufficient capital, or mismanagement, there are ample opportunities to obtain the necessary resources. Moreover, there are still some landlords leasing fully equipped and furnished spaces that have been abandoned or locked due to non-payment of rent. By making only cosmetic adjustments, a business can be up and running quickly and cost-effectively.
2. Favorable financial conditions: Banks and financial institutions are in the business of lending money and generating interest. Despite stricter credit criteria of late, they still have a need to lend money, especially when the pool of potential borrowers has diminished. This presents an opportunity to negotiate favorable terms for loans, as well as other financial agreements such as credit card processing fees and equipment leasing. Similarly, investors looking to diversify their portfolios may be interested in investing in new business ventures instead of the stock market.
3. Future potential and opportunities: Inspired by reality TV shows focused on property flipping, we have become captivated by the possibilities of purchasing and renovating properties for profit. While I don’t suggest starting or buying a business solely for the purpose of flipping it, there is a high likelihood of selling a business after three to five years for a significant return on investment if it was initially established with a lower-than-average investment. Alternatively, a business owner may reach a point where their business is debt-free, providing the freedom to explore other opportunities.

To further bolster the argument for starting a business now, let’s again visit a list of companies that began during a recession: Microsoft, FedEx, Trader Joe’s, Hyatt, HP, Disney, IBM. Additionally, some notable companies launched shortly before challenging economic periods, including Salesforce, Google, and Facebook, which emerged a few years before the Great Recession.

Resources & Support

With over 70 years combined experience focused on entrepreneurship, small business, franchises and restaurants, we know what it takes to succeed in both good and challenging times. We share our knowledge and passion to help entrepreneurs and business owners realize their success.

If you are seeking guidance and support, feel free to contact me today. You can reach out through LinkedIn, email me at Paul@Acceler8Success.com, or contact me via phone or text at (832) 797–9851.

Make it a great day. Make it happen. Make it count!