When is the Perfect Time to Start a Business?
Forget about whether you have enough time or money. There are only two things you need to start a company, and they’re not what you think.
You have a great idea, and you’re going to start a company!
. . . as soon as the economy improves.
. . . as soon as you’ve finalized the perfect business plan.
. . . as soon as you have enough capital.
But you never reach that “perfect” moment where all the right circumstances are aligned, so your great idea never sees the light of day.
The best ideas in the world are just ideas. But taking the leap is scary. So instead, we procrastinate, coming up with all kinds of reasons and rationalizations why we shouldn’t yet begin.
So if it’s not about the economy, or the money, or any of the other dozen excuses in your head, when should you decide to start a company?
You see an opportunity.
Our Chairman, David Mahmood, grew up in a family that had lived through the Great Depression. His father and three other gentlemen partnered up and opened seven speakeasies. While most workers were struggling to earn ten or fifteen dollars a week, those four partners never made less than $350 a night — each! When you spot an unfulfilled need in the marketplace, you can be extremely successful, regardless of a depression or recession (although I recommend staying on the right side of the law).
David Mahmood himself founded Allegiance Capital 14 years ago, at the age of 60, the eighth company he has started from scratch. The world wasn’t clamoring for another investment bank, but David saw that the industry wasn’t providing quality services to the lower middle-market, and he jumped on that opportunity.
You’re willing to take on planned risk.
There’s a stereotype that entrepreneurs are crazy, reckless risk-takers. Walt Disney, for example, bet the farm on new ideas and new technology over and over, while Roy scrambled behind him trying to pick up the pieces. The truth is that reckless entrepreneurs rarely succeed. Yes, starting a business is risky – but successful entrepreneurs approach this thoughtfully, and do what they can to mitigate the risk.
In David Mahmood’s case, he had spent a dozen years being a client of investment banks and brokerage firms, so he had a real appreciation for what the industry provided, and he understood the ways in which most investment banks didn’t meet the needs of entrepreneurs. When he decided to start one of his own, he spent several months interviewing the bankers he’d developed relationships with, eventually compiling that wisdom into a 75-page manifesto on middle-market investment banking best practices. That experience and planning mitigated the risk of starting his own venture.
Now take action!
How many times have you seen a new product or service come on the market, only to think, “But I had that idea three years ago!” If you’re one of those people with an inventive, creative mind, it seems like it happens all the time. (To take a personal example, my father came up with the idea for a helicopter beartrap in 1942, when he was twelve years old. It would take the rest of the world until the 1960s to figure it out for themselves.)
One of our bankers wrote a book aimed at college graduates, which became quite successful. Upon reading it, one of my acquaintances sputtered, “But—but—anyone could have written that! Even I could have written that!” “Maybe so,” I replied. “But you didn’t, and he did.”
You don’t need a better economy, or more start-up money, or more space, or more time. If you see the opportunity, and you can mitigate the risk, there’s really nothing stopping you.
And if you’ve already grown a successful business? Then maybe now’s the “perfect” time to sell your company and start a new one.