It could be a good time to start a business

It could be a good time to start a business
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First Published: Sun, Apr 05 2009. 10 09 PM IST

Updated: Sun, Apr 05 2009. 10 09 PM IST
Is now the right time to start a business?
—Anand Deb, Vancouver, Canada
Did we read that right? If so, thank you. Amid the emails we’ve received lately from people feeling panicked, irate and/or depressed about the economy and their careers, your simple query was a welcome surprise.
And it was a welcome opportunity for us to realize that it could be a very good time to start a business. In fact, we can think of at least four compelling reasons why, but only if the business you’re hoping to start passes one major test: It can sell more for less.
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To be clear, we don’t mean a little bit more for a little bit less. In these recessionary times, a new business doesn’t stand much of a chance unless it provides a value proposition that’s demonstrably superior to current offerings. Not that long ago, you could still take a competitor’s service or product, tweak it or slap on a new feature or two and persuade customers to buy it at a premium. But with everyone in hunker-down mode, the days of marginal up-selling are gone—and could be for some time to come.
That said, if you’re an entrepreneur who has come up with a product or service that will significantly improve people’s lives—at a significantly lower cost than the competition—this might very well be the right time to forge ahead.
First, if there is one thing a start-up needs to get out of the gate fast and compete effectively, it is smart, driven-to-win people, and those people happen to be more available now than at any time in recent memory. Obviously, layoffs are a terrible, terrible thing, and there are millions of painful human stories behind the (US’) current national unemployment rate of 8.1%. But the fact is, new businesses live or die depending on how quickly they can bring together bright, flexible, “hungry” employees. The current climate, with seasoned professionals and freshly minted MBAs alike looking for work, facilitates that process.
The second, related reason has to do with something more ephemeral: the general urgency and lack of arrogance most people are feeling these days. The economy’s implosion has taken everybody down a notch. Former “Masters of the Universe” have discovered they’re mere mortals, and people who thought it was all about them have discovered that if their companies don’t succeed, they don’t either. Even regular folks have had to confront the fragility of their industries and livelihoods. So not only has today’s environment made it easier to hire good people, but it has also fostered among employees a new understanding of the importance of true teamwork and unrelenting productivity. Such a “vibe”, for lack of a better word, is every manager’s hope, and every entrepreneur’s dream.
The third reason concerns money. Despite all the news about tight credit markets, financing for start-ups does exist, especially for those that have passed the more-for-less test. We’re not suggesting that today’s entrepreneurs can expect the fairy-tale conditions of yesteryear. But many regional banks are eager to lend, and venture capital firms are always searching for breakthrough investment ideas. After all, start-ups are the lifeblood of their business.
Finally, starting a business now will position you to enjoy the eventual economic recovery. Just think: If you start your business now, it will be staffed with smart, energized employees who have learnt how to work together to keep costs low and innovation high. Your company will carry no legacy costs, nor will it bear the scars of layoffs and the low morale that accompanies them. You will, in other words, be poised to catch the earliest wave of the turnaround and ride it to the next level. How exciting.
©2009/BY NYT SYNDICATE
Write to Jack & Suzy
Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Winning. Their latest book is Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today. Mint readers can email them questions at winning@livemint.com Please include your name, occupation and city. Only select questions will be answered.
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First Published: Sun, Apr 05 2009. 10 09 PM IST
More Topics: Jack Welch | Suzy Welch | Video story | Business | MBA |