Should I wait before opening up my small business?

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Rexel2

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Hi there
I'm wondering what people's thoughts are on opening up a business in the current climate (recession likely, etc). Am PAYE worker at present, had been seriously looking into opening up an upmarket craft/design shop in a relatively affluent tourist town.

However, the economic negatives have been increasing; likely recession in Ireland/property market imploding (imo, the housing situation is likely to be a drawn out one with hefty falls); likely recession in US, which looks like it will go into 2009 and maybe beyond; collapse in US dollar (my business would not be exclusively aimed at tourists but they would constitute a fair segment); UK recession/global economic slowdown.

The truth is that I'm not sure how badly particular businesses can be affected in a recession. Obviously, I'd have been much better off opening up my shop a few years ago rather than today, I know that, but how significant a difference might it be? This would be my first business and I have no idea of the likely shortfall in income, etc, in different economic climates. I believe my shop would be a very good one, better than the competition. However, would that be enough in the current situation? Am I better off waiting a year or some such duration?

I realise that no-one can definitively answer me, just looking for some opinions here, particularly from anyone who has operated a small business in times of economic difficulty.
Thanks in advance
 
I genuinely think that now is not a good time to start up in business. Particularly, in a "non essential goods" market. I have been working for myself since 1988 and business has quite simply never been so bad.

I believe that everyone will be hit by the slowing up in the economy and that businesses who are in any kind of non essential market will find their business stopping.

The best piece of advice to give you is to try and find some part time work in a similar type business and garner as much information as you can about the nuts and bolts of the financing of the business. Mind you, anyone you would be working for ( if you could even find the work) would be fairly ticked off if you subsequently set up in competition with them.

If you have never run a business before, it can come as an incredible shock to see how quickly debts for rent, rates, tax, stock, staff etc.,etc can mount up while income remains at best static or at worst non existent.

mf
 
Im starting up a business in the coming weeks,i've waited ages for the opportunity so im not going to stop now.Even though it probably is not a 'great idea'.I think it depends on what your doing too.
 
hi rexel2,
i started a bus' in a tourist town in 93,and i have to honestly say,this year has been quite,but this july is by far the worst july i've ever seen,and i dont anthisipate a surge in august,now thats out of the way.one must remember that we've had massive growth in this country in the last number of years,touching almost every industry,and now there is a big drop off,because people have so much debt.there alot more careful with there money not so care free,and you will have to work alot harder to earn a living from the range you discribe,thats not to say it cant be done,but ithink you need to do a lot more home work.
how is this affluent town at the moment,does it have alot of tourists,are the shops buisy,doesn't matter how good your product is if no one coming to town.
do they have a tourism board or chamber of tourism,perhaps you could talk to a member to see how buisness generally is doing.
if you establish that bus' in the town is down say 20%,then you must take that amount off your sales target and reajust your projected bottom line------now how does that look.
these are all projections,but one things for sure costs are going up,so on your spread sheet as your estimated sales are going down your cost are rising and your profit margin is squeezed,do the leg work now before you start spending money,and get as many fax and figures as poss,and do the paper work,you'll find your own answer.
be prepared to work long hours too.best of luck.
 
Hey,

I start my own business a year ago and in the process of starting another Co. now. One of the main reasons is my need to diversify i.e. spread the risk becuase my existing Co. is in Mortgages. I am very busy but as we all know things are not what they were a year ago.

Recession or not you have to reasearch the demand for your product, spending time on a business plan will usually help. Ring suppliers, ask them has their been a decline in orders for your products, where sells most etc.

If you do go for it, very best of luck and I hope it goes great for you.

Brendan
 
I Am In A Similair Position I Have Recently Recived Planning To Build A New Retail Store I Also Received Financial Backing From My Bank My Problem Is That My Business Is Construction Related And With The Down Turn In This Market I Am Very Reluctant To But Myself Into Any Further Debt On The Otherside Of The Coin There Has To Be Better Days Ahead And Once You Are Self Employed It Is Very Hard To Go Back Working For Some One Else
 
I guess its down to the specific area of your business. If you think that there is a market for your product and you can compete with companies offering similar products\services...then why not?

From what I can gather, a good business model will succeed in times of recession but I suspect your customers are not necessarily Irish ( German, US , UK etc)...have you got any figures from Failte Ireland? They should be able to tell you what the trend in visitors looks like....I US visitors are down substantially but UK\European visitors are still coming.

I am also in the process of setting up a business and am taking a huge financial risk. My hope is that I am offering a superior product at competitive pricing....maybe it won't be enough to help the business get off the ground but it won't fail for the lack of hard work!
 
Thanks for replies guys. Have decided to wait until next year, better to be safe than sorry.
 
Hi Rexel, I'm in a similar position. I am on a career break from the public sector at the moment and thinking of setting up my own business. It's scary to leave the security of the public sector but on the other hand if we all take the attitude that the economy is going down the toilet don't take any risks the situation will only get worse. My husband set up his own shop a couple of years ago and it's going strong. He works bloody hard to meet his customers needs, having the stock they want at the price they want and sales are strong. But he loves it. Ask yourself do you love selling, do you find you can't stop thinking about your project. If you have never worked in retail then it's vital that you get some experience, if you're not prepared to take on the extra hours on top of your current job then running your own business may not be for you. It's not a handy number but if you're very passionate about what you want to do then go for it.
Get some info online or from books on writing a business plan to see if the numbers add up.
Some relevant questions to retail are -
what does retail space rent for in the area you plan to sell in?
The is the footfall in that area?
What discount do you get as a retailer for the goods you plan to sell?
What quantities do you need to buy in?
Talk to people who run similar businesses but who won't be in direct competition with you, people are always happy to talk about themselves!
 
Go for it , I am PAYE worker too, and it aint easy . Dont let negative talk of recession put you off . Check out the grants available with you local Co.Co. / enterprise board . My local one is : [broken link removed] Go ahead and best of luck
 
There aren't any grants for retail unfortunately. Try to rent a space within a state owned property if possible, keep an eye on the Irish tenders website.
 
My advise would be go for it. A well-run business will survive the inevitable slowdown we are experiencing. Badly-run businesses will fall by the wayside. My business is involved in setting up companies and we are still extremely busy, although I know a few of our competitors are suffering. Our focus is on competitve pricing, excellent service and providing added value to clients which is the cornerstone of any business.
 
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