GaragePowered

When is the best time to start a new company?

As some one running on Garage power, what is the best time to start a new company? Is there a bad time?

There have been many discussions as whether you should start a company during a recession or during a boom time, but I think most of those discussions are targeted more at companies looking to raise money from a VC.

As a potentially VC backed company your primary goal is to gain investment capital, once you’ve done that you can turn your attention to business of doing business. External factors that affect the VC’s will impact your ability to raise capital. Factors such as stock market moves, Federal Reserve interest rate changes affect how much investment capital the VCs have on hand, the overall state of the economy will affect how likely the VCs are to actually invest in any or specifically your business.

For those GaragePowered you jump right into building your company, the overall state of the economy may affect the likely hood that you’ll be able to find consumers for your products, however if you have a product that people need they are likely to buy it regardless of the current economic situation. Also, if you have a product that will save your customers money (either because it costs less then existing comparable products, or through efficiencies) poor economic times may prove to be better times for your business.

If you’re bootstrapping your business, then costs are very important factor in running your business. A poor economic climate might be just what you’re looking for. Businesses are more likely to offer you good rates when times are slow, from contracts on hosting to hiring specialists (designers, developers, whatever you need) you’ll probably be able to find better deals during slow times, then during economic boom times.

Sounds like economic down times are a great time to get going, but depending on your business you want to get ahead of the curve. If you have a product or service that consumers will want during down times, you’ll need to get going before the economy gets there.

Ultimately for the right idea there is no bad time to start, and no good time, whenever you decide you are ready is the best time. For a bad idea, well you just shouldn’t start those!

This entry was posted on Friday, August 15th, 2008 at 4:53 pm and is filed under Startup. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.