To say that things are bad economically is a bit of an understatement. Stocks took a beating to the tune of 500 points today after the news came down that Lehman filed bankruptcy, Merrill was sold to Bank of America, and that AIG is scrambling for cash to stay afloat. Oh, and did we mention that Washington Mutual's shares are down too?
The question is (well, for us) whether any of this has any real, measurable impact on entrepreneurs who want to start a business right now. On one hand, the ups-and-downs of Wall Street don't much matter for the average person who isn't investing heavily or flipping assets. And, as we've noted before, a down economy can actually afford entrepreneurs opportunities they didn't previously have. Yet, on the other hand, the general health of the economy does tend to have an impact on businesses—big or small.
That's why we're putting the question to you, readers. Would you start a business in today's economy? And does the roller coaster (or log flume) ride Wall Street's been on have any measurable impact upon your decision? Tell us what you think in the comments section below.
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I agree with benpirie. A business that begins during times of turbulence can be stronger for it. Being efficient, avoiding excess, and knowing your market's desires is certainly critical. I'll share an anecdotal story. I co-owned a small retail business a few years back, and for the first eighteen months of its existence, the arterial road in front was shut down. People walked through the mud to come inside. The road was finally fixed ... (wait for it) ... in August 2001. We survived the next few tumultuous months by staying conservative, and we had a good liquidity that saw us through less-than-stellar months. The majority owner (hi Mom!) also had a good pulse on her target market, and was able to remain nimble, and the store eventually became profitable. But we managed to stay the course because of the adversity. So, don't despair!
—Mahesh
13:55, September 17th, 2008
Whether now is a good time to start a business or not, I would think businesses that do pop up in troubled times would be stronger for it. The problems facing the economy seem to stem in no small part from intemperance and excess. If one is forced cut corners and find efficiencies in the beginning, these are more likely to become habits. This should make businesses, and the economy as a whole, more resiliant.
—benpirie
17:42, September 15th, 2008
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