Is starting a business high on your to-do list this year? Your timing might be impeccable — or it might be a good idea to reassess.
How can you tell the difference? Entrepreneur George Otte suggests that you use these four tried-and-true tactics to determine whether it really is the best time for you to strike out on your own.
Wait Till You’ve Spotted the Perfect Opportunity
Even if you’re not a certified expert, it’s possible to spot a business opportunity in virtually any industry. Has there been a major shift in consumer tastes that you can make use of? Are there existing products or services that you can bundle in value-added fashion? Does your local market lack some essential product or service? If you’ve said “yes” to any of these questions, you might be onto something.
Be Bold. Be Confident
After a stock market sell-off, bargains are bound to be found amid the wreckage. The same principle can work for general business, too. After an economic downturn or sector contraction, your industry’s incumbents are likely to be under pressure. Some may be willing to sell out for less than their business is worth, or at least sell you some assets on the cheap. Others may go out of business entirely, creating a vacuum that your new business is primed to fill.
Have a Top-Notch Team in Place
These days, many companies begin as one-man or -woman operations. But if you’re going into a more labor-intensive niche, it helps to have a quality team in place before you hang your shingle and announce your intentions to the wider world. If you can’t sell your vision to prospective employees, your timing might not be right.
Make the Business Case
Businesses fail for many reasons. One of the most common: money — or the lack thereof. Before you invest a great deal of time, energy and personal resources into your business idea, make sure that others are (literally) interested in what you’re selling.
On the one hand, you’ll need to confer with investors (who may well be your friends and family) to determine whether you’ve really got a killer product (or app). Are they willing to put their money where their faint words of praise are?
On the other, you’ll need to do some market research (or old-fashioned prospecting, depending on your line of business). Do theoretical customers really want to buy your products or services? Or is your business going to be DOA?
The two sides of this coin are linked, of course. Investors aren’t likely to support a business idea that doesn’t have much support on the consumer side. And, though they might not be able to tell right away, customers aren’t likely to stick with an underfunded business that can’t meet their expectations for service or quality.