Post by oldman on Oct 15, 2014 10:28:58 GMT 7
2002: Be an Entrepreneur!
Section: The journey
There will never be a right time to launch a business. During the heyday of the dotcoms, money was everywhere. Any idea could get funded. Since financing was not a problem, companies sprang up all over the place. Everyone wanted to have something to do with the Internet. As there were not as many new ideas as there were people, the Internet became very crowded. Those who were not able to get any funding in place still went on to build their Internet companies because starting a dotcom company was relatively cheap.
When the dotcoms bubble burst, many hopes were dashed. Those who were hoping for additional funding knew that their fate was sealed and they had to close their business. Those who had funding in place realised that their original business model would not work as they were giving things away for free and their traffic could not attract sufficient advertising revenue. Some went on to liquidate their business to salvage as much cash as they could.
However, the few dotcoms that had a sound business model and adequate financing in place survived. These are likely to become the market leaders of tomorrow, when investors start realising that there is, after all, a place for Internet companies. Also, those entrepreneurs who survived have shown their ability to weather the storm and this will put them in good stead when the good years come round again.
As the dotcom collapse sent most of the major stock markets spiraling, financing of any nature has now become tougher than ever before. Investors who lost heavily during the dotcom downfall are now extra cautious with any type of investment, whether it is linked to the Internet or not. Hence, getting funding in such a bearish investment climate is much tougher, but not impossible. What the entrepreneur needs now is a much stronger business case. However, he should be comforted by the fact that if he manages to get funding, he is likely to face less competition than during the boom days of the stock market.
Entrepreneurs who are frugal and start small may find the recession a good time to start their business. Rentals are cheaper. Good people are also easier to find and keep. On the other hand, finding new customers will be more difficult during a recession and entrepreneurs must realise that the going will get tougher as the recession drags on. The entrepreneur should also be aware that during a recession, it is much harder to raise funds. As such, he should ensure that he has sufficient funds to last at least a year on his own. This does not mean that the entrepreneur does not look for funding. On the contrary, he should spend more time looking for funding, as this is harder to get now than before.
However, he can feel comforted by the fact that other budding entrepreneurs will face the same obstacles as he. In addition, although it is tougher during a recession to obtain capital injection, he will face less competition once he is successful. Another way of looking at it is that in a recession, one fights hard to get funding but once the funding is in place, it should be easier to build up the business.
On the other hand, during the good times, it is easier to get funding but it is much harder to build a business as everything is more expensive, including rentals and salaries. Acquisitions of other companies are also much more expensive during the good years. Added to this is the fluidity with which employees flow from one company to the next during the bull years.
Launch your business whenever you are ready. Do not try to time the launch, as there will always be challenges whether you launch your business in a good or in a bad year. An entrepreneur will weather the storm and will adapt, as he knows that he will have to go through many cycles of good and not-so-good years.
I used to think that the best time to start a business is when one is single. This is because without a family, the risks are lower. Hence, I am always surprised by entrepreneurs who set up their business when they have just started a family.
Yet, I ended up starting my business with the arrival of my first child. When I looked into her eyes, I realised that I was now responsible for her life. Like every parent, I wanted to give her the best I could. Although I led a comfortable corporate life then, I knew that I might not always be gainfully employed. Neither could I assure her of a bright future, given that competition was likely to get tougher for her, just as it is tougher for us compared to our parents’ time.
I knew then that I had to take the risk and build up my own business, so that I would be able to dictate my own financial future and hopefully, in the process, assure her of a brighter future. With the arrival of my second child, this determination grew even stronger.
The arrival of our children does change our perspective in life. Looking back, I am thankful to my kids for pushing me to take the risk and to become an entrepreneur, as I have never enjoyed myself as much as in running my own companies.
Section: The journey
There will never be a right time to launch a business. During the heyday of the dotcoms, money was everywhere. Any idea could get funded. Since financing was not a problem, companies sprang up all over the place. Everyone wanted to have something to do with the Internet. As there were not as many new ideas as there were people, the Internet became very crowded. Those who were not able to get any funding in place still went on to build their Internet companies because starting a dotcom company was relatively cheap.
When the dotcoms bubble burst, many hopes were dashed. Those who were hoping for additional funding knew that their fate was sealed and they had to close their business. Those who had funding in place realised that their original business model would not work as they were giving things away for free and their traffic could not attract sufficient advertising revenue. Some went on to liquidate their business to salvage as much cash as they could.
However, the few dotcoms that had a sound business model and adequate financing in place survived. These are likely to become the market leaders of tomorrow, when investors start realising that there is, after all, a place for Internet companies. Also, those entrepreneurs who survived have shown their ability to weather the storm and this will put them in good stead when the good years come round again.
As the dotcom collapse sent most of the major stock markets spiraling, financing of any nature has now become tougher than ever before. Investors who lost heavily during the dotcom downfall are now extra cautious with any type of investment, whether it is linked to the Internet or not. Hence, getting funding in such a bearish investment climate is much tougher, but not impossible. What the entrepreneur needs now is a much stronger business case. However, he should be comforted by the fact that if he manages to get funding, he is likely to face less competition than during the boom days of the stock market.
Entrepreneurs who are frugal and start small may find the recession a good time to start their business. Rentals are cheaper. Good people are also easier to find and keep. On the other hand, finding new customers will be more difficult during a recession and entrepreneurs must realise that the going will get tougher as the recession drags on. The entrepreneur should also be aware that during a recession, it is much harder to raise funds. As such, he should ensure that he has sufficient funds to last at least a year on his own. This does not mean that the entrepreneur does not look for funding. On the contrary, he should spend more time looking for funding, as this is harder to get now than before.
However, he can feel comforted by the fact that other budding entrepreneurs will face the same obstacles as he. In addition, although it is tougher during a recession to obtain capital injection, he will face less competition once he is successful. Another way of looking at it is that in a recession, one fights hard to get funding but once the funding is in place, it should be easier to build up the business.
On the other hand, during the good times, it is easier to get funding but it is much harder to build a business as everything is more expensive, including rentals and salaries. Acquisitions of other companies are also much more expensive during the good years. Added to this is the fluidity with which employees flow from one company to the next during the bull years.
Launch your business whenever you are ready. Do not try to time the launch, as there will always be challenges whether you launch your business in a good or in a bad year. An entrepreneur will weather the storm and will adapt, as he knows that he will have to go through many cycles of good and not-so-good years.
I used to think that the best time to start a business is when one is single. This is because without a family, the risks are lower. Hence, I am always surprised by entrepreneurs who set up their business when they have just started a family.
Yet, I ended up starting my business with the arrival of my first child. When I looked into her eyes, I realised that I was now responsible for her life. Like every parent, I wanted to give her the best I could. Although I led a comfortable corporate life then, I knew that I might not always be gainfully employed. Neither could I assure her of a bright future, given that competition was likely to get tougher for her, just as it is tougher for us compared to our parents’ time.
I knew then that I had to take the risk and build up my own business, so that I would be able to dictate my own financial future and hopefully, in the process, assure her of a brighter future. With the arrival of my second child, this determination grew even stronger.
The arrival of our children does change our perspective in life. Looking back, I am thankful to my kids for pushing me to take the risk and to become an entrepreneur, as I have never enjoyed myself as much as in running my own companies.