Knowing When to Start A Business

It is not uncommon to hear that a downturn in the economy is a good time to start a business.

However, according to the Bureau of Labor Statistics, the numbers show that small business start-ups have slowed. The number of people calling themselves self-employed went from 16.3 million in 2006 to 15.6 million in 2008.

Economists say the creation of a certain amount of new sole proprietorships is common in weak economic cycles.

"Job market insecurities and the desire for a freer lifestyle prompt some to take risks," said Brian Headd, an economist with the Small Business Administration (SBA).

Yet, one explanation for slow start-ups maybe the current tightening of the credit markets. Therefore, access to capital is more of an issue than ever before in the world of the small business owner. Even well-established businesses are having difficulty gaining access to existing credit.

With all this in mind, if you still believe the time is now to start a new business, keep in mind some key questions and points:

-Why do you want to start a business? To get rich? To get paid to do what you love? Or both?

-How hard are you willing to work? Chances are, in starting a business, you will work harder than you've ever worked in your life.

-What businesses will be your competitors? What's the state of your industry? Visit ReferenceUSA.com, Dun and Bradstreet Key Business Ratios and County Business Patterns.

-Develop a Business Plan that will help 1) identify your market; 2) identify your competition 3) determine start-up costs 3) get and idea for an exit strategy as well as a start-up strategy

-Develop a web site and an online marketing strategy

-Get a mentor

-Identify family and friends you know you can count on for support

-Know how much money you will need and how much of yours you are willing to invest

-Identify a good accountant - particularly one that specializes in small businesses

-Become familiar with potential tax liabilities in the beginning and budget for them

-Keep costs and overhead low

-Set-up a system for operating (even if it's just you at first)

-Finally, A.B.N. - Always Be Networking. This combined with a strategic, low cost advertising and marketing campaign can be the key to your success.