Should I Launch A Managed Services Business In the Recession?
When the email hit my inbox it immediately caught my attention. A technology consultant wanted to know if (A) it's still a good time to launch a managed services business or (B) is it smarter to delay the launch until after the recession ends? I've got some strong opinions to share.
Frankly, I think the aspiring entrepreneur was asking the wrong questions. My knee-jerk reaction was to tell him to ignore the recession and press forward with the business launch. After all, CompTIA research notes that MSPs are holding up well in the recession.
Revising My Answer
But now that I've had 24 hours to digest his email, I'd like to revise my response quite a bit.
Generally speaking, I believe there's never a "bad" time to be an entrepreneur. Over and over again, great companies have been launched during bleak economic times. And entrpreneurs can't fight their DNA. They need to build new businesses.
But there's a bigger question here: Instead of worrying about the recession, aspiring entrepreneurs and would-be MSPs have to ask themselves far more basic questions…
1. Financials: Do you have your personal financial house in order?
- Do you live within or below your financial means?
- Do your credit card balances read "zero?"
- Can you afford to go six months — or more — without a salary as you build your business and your business assets?
- Is your family willing to make financial sacrifices while you pour money into your start-up business?
If your personal finances are a mess and you still have a day job then KEEP your day job until you can prove to yourself (and your lenders) that you can effectively manage money and live below your means.
2. Personal Commitments: Are your spouse and family willing to allow you to work insane hours as you create a business? Or would they prefer the comfort of a steady paycheck, health benefits and other "perks" from traditional career moves?
3. Talent: Do you have the right set of skills to actually launch and build your business? Technology. Financial management. Sales. Marketing. Yes, marketing. If you lack skills, how are you going to fill those gaps?
4. Co-Founders: Do you need to launch the business with a partner who brings incredible skills to the table that you lack? If so, does that partner share your financial goals and financial priorities? Remember: Money changes everything. If you don't have similar financial views from Day One then your business is already dead.
5. What Are You Running From?: This little gem comes from Mitch York, founder of E2E Coaching. York helps to transform executives into entrepreneurs. But before he begins a coaching engagement, he asks the prospective entrepreneur the following question:
- Are you running away from something?
- Or are you running to something?
In other words, don't launch a business because you hate your current job or because you're unemployed and don't know what else to do. Instead, run toward something that you'll love — whether it's a new full-time position or the dream of running your own company.
Bottom line: Sure, the recession is a factor as you weigh your potential start-up strategy. But it should not be the determining factor in your entrepreneurial decisions.