Is the present economy a ripe climate to start a business?

 In Small Businesses & Startups

Since 2007, the headlines have been dominated by news about the economic downturn and the very slow road to recovery. Even now that the worst has passed, the economy has been growing by a mere 0.2% or less each quarter – much lower than the Chancellor’s predictions and expectations.

But does this mean that you should immediately reject the idea of starting a business?

Do your research

Whether in the midst of a recession or a massive economic boom, market research is essential to assess the viability of a new business. Find out what the market for your idea is, the target audience and the existing competitors (even tangential ones). Based on these researches, ask yourself: is there actually a demand for your product or service? Or can you create new demand?

If the answer to either of these questions is no, the health of the economy will make little difference. If you can answer yes however, then with hard work you can get your business going.

Potential problems

Perhaps the biggest challenge you will face is financing your business start-up. Since the downturn, banks have tightened their lending criteria to reduce their own risk. This means that not only is the application process more complex, but that lenders expect far greater guarantees of success from you as a business owner. Your business plan will need to be bulletproof to pass scrutiny – though it is worth noting the good news that application approval rates for banks lending to SMEs have now risen to 76%.

Discussions with an SME specialist accountant like 3 Wise Bears will help you gather ideas and advice, both for your early market research and for your funding application. You will find that, with someone at your side who understands both the economy and the financial requirements of a new business, you will be better able to make your SME flourish in the current climate.

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