Is This A Good Time To Start A Business? (Part 1)

Recently, I'd had several friends pose this question. Included inthis group were people concerned about their future - both employed andunemployed. They've asked:

- How important is the underlying economy to start up success? Answer: Somewhat important
- Can a new business really succeed in today's economy? Answer: Yes

Thecore consideration is your personal tolerance for risk. Risk is a greatacademic concept and a pivotal investment concept. On a personal basis, accepting the consequencesof risk can be hellish.

First and foremost, you have to be ableto define how much risk (think total dollar outlays for how long) justto get a new business to positive cash flow. Every business has a start up cost -- even a lemonade stand.

This chart represents the concept. Typically, a more complex business requires much more start up investment than a straightforward personal service business. 

If you are thinking that starting a business is a way to create a salary for yourself -- you probably going to be disappointed. 

Creating a business is about customers. It is not about you and your needs.

Peter Drucker famously said, "The purpose of a business is to create a customer."

In the next post, we'll dig into what it means to "create a customer".