As the coordinator for a think tank which happens to operate online, I seem to be reading more business plans for new start-ups and innovative entrepreneurs than I care to these days. It’s not that I don’t applaud these individuals for going for it, I totally do, and I very much understand where they are coming from. You see, I started my first company when I was 12 years old, and I franchised my company in 23 states before retirement.
With all those franchisees around the country, I’d say I know a thing or two about when the best time in the business cycle might be to start a small company. The other day I was asked by an entrepreneur in Los Angeles if he thought this might be a good time to start his company. There are pluses and minuses to starting a small business at a time when the country’s economy is teetering on recession. But that’s not the only consideration.
There was a troubling article in Manufacturing (dot) Net on December 12, 2012 titled; “Small Businesses Already Slipping Off the Cliff,” by Joyce M. Rosenberg, an AP Business Writer. The article noted a franchise buyer telling the franchisor that they didn’t feel comfortable buying the franchise right now due to the “fiscal cliff” and challenges with the economy moving forward.
What do I think? Well, I agree. You see, I’ve been advising prospective franchisees NOT to buy a franchise, we cannot trust regulators to put forth new onerous regulations, congress to pass omnibus bills which contain things we cannot foresee or they haven’t read, and the uncertainty of socialist leadership running amuck – these folks in DC are destroying opportunity and our economy, there is NO trust left.
More or less, I’d say one of the biggest challenges is not only the government’s spending of money, but it is how they are managing, or rather mismanaging our economy presently. With all the overregulation, and all the new taxes coming, there is just too much uncertainty for smaller companies. This is really too bad if we expect job growth in 2013. So the answer to the question; “should I start a small business in 2013?” My answer is no, no you should not. Does that mean you should wait? Yes probably you should.
That doesn’t mean you shouldn’t go and get the patents for your new innovation, or try to find buyers for your products and future services, or even start lining up the talent you need for your management team. This might be a good time to hone your business plan, meet the right people, and then if you have everything you need, and you can get funded, then and only then should you go for it. But still realize it will be a bumpy road regardless of what products you offer, or which services you can perform in the free-market. Please consider all this and think on it in 2013.