I want to start my own business but I’m not sure if it is a good idea with the economy. Can anyone help?

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I want to start my own business but I’m not sure if it is a good idea with the economy. Can anyone help?

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Question by Melissa P: I want to start my own business but I’m not sure if it is a good idea with the economy. Can anyone help?
I am interested in opening a crafting center where people go to take classes, work on projects, etc. Does anyone think this business would work in todays economy? My plan was to wait for a year or two until my children are in school and I would not be paying for daycare however there would still be expenses I would have to pay for and I don’t want to get in over my head. Please advise!!

Best answer:

Answer by Mark Welch
During a recession, people are looking for lower-cost activities, so a craft center might be a good idea. However, “craft-related” businesses often have a very slow “growth curve” as word gets out about your business. (My wife is a Creative Memories consultant, selling scrapbooking products, and runs scrapbooking workshops; previously she ran a “Kids Can Sew” business; so I think I have some sense of what you’re thinking about.)

I would strongly suggest that you prepare a very detailed business plan, identifying all your known expenses for the business, and try to include realistic projections about revenue. Some expenses will include: rent, business license fees, possibly incorporation costs, accounting help (to deal with payroll & tax reporting), employee wages, inventory/’cost of goods sold,’ cost of consumable supplies, furniture (tables, chairs, shelving, storage), tools, insurance (several kinds!), advertising (yellow page, web site & other internet advertising, newspaper, newsletters, etc.), utilities (heat/light/phone), and DOZENS of other expenses.

Nearly ALL new businesses lose money during their first year, and of course “most” new businesses fail within the first 2 years.

One question I always ask people is, “have you worked in this industry before?” If not, how can you really know if you’ve identified key issues, and of course how can you know if you’ll enjoy the work?

In terms of predicting the “market” or likely revenue, there is absolutely NO measure that’s better than knowing the actual sales and profit figures for other, similar businesses. Some of your potential suppliers may be able to help you make connections with similar businesses in other regions (not your local competitors).

There are local organizations that may be able to help you get FREE advice (I believe SCORE helps small business startups with advice from retired businesspeople; if you’re considering taking out a business loan, your banker may be able to point you to helpful resources).

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