Should you start a business in this mess?

If you’re under 40, you definitely haven’t been an adult in an economy this bad. If you’re under 70, you haven’t been alive in an economy as bad as some people say we’re in for.

Since that’s everybody reading this (except for you, brave 80 something reading a blog post about starting a business), we’re all in the same boat here. This economy is rough, we aren’t quite sure what’s going to happen, and why in the world would you take a big financial risk like starting a business in this environment?

There isn’t a pat answer to this. You DEFINITELY should factor it in and some businesses probably aren’t ripe for starting at this particular moment. But you already know this. What can I say that will impact your thinking?

If you have a business built around a bigger force than the macro-economy’s force on it, then keep going. This can be broad or very specific. Here are three examples:

1. Demographics. If your business is built around a demographic force that isn’t going to change, keep going. Since this is so broad, you certainly need to think about (or get some outside perspective) on how the economy might affect the demographic force you’re tapping into, but demographics is a major force and if you are working with it, it’s a major advantage. I recently learned Rosetta Stone sales went up 50% last year. Globalization, worldwide nomadic behavior, and America’s fascination with “cultural awareness” aren’t going away and Rosetta Stone is a huge beneficiary.

2. Industry/Category force. The iphone is the best example. If you can grab the coattails of a force like this (such as developing killer iphone apps), keep going. The cell phone industry might flatten a little, but isn’t going anywhere…and the iphone is gobbling market share for breakfast. That iphone force is cutting through economic headwinds like butter.

3. Your business. Let’s say it’s talent (a Great Team). Let’s say it’s capital resources (a rich Dad). Let’s say it’s a rock solid patent (a Great Invention). Let’s say it’s a big customer (Michael Dell is your godfather). If you have a force that greatly impacts your chances for success and enhances your profit-potential, it might be appropriate to say “bad economy, be damned!” There are a lot of advantages to starting a business in a down economy, and it’s rare to have the formula for success in any economy, so if you have a major factor working in your advantage, keep going.

p.s. if you don’t think you have any of these inherent advantages, or identifiable advantage (that is not an illusion in your head), don’t start a business, not just now, not ever. There are a million businesses one could start. Starting without an advantage is a bad idea!

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