When To Start Looking for a New Business
Over the course of my 25-year career, I have met thousands of small business owners. Most of the time those owners were working on improving their existing businesses. However, if I spent enough time with that owner, it was inevitable that our conversation would drift towards what other businesses they were thinking of starting. This makes perfect sense. By our very nature, Entrepreneurs love thinking about new businesses. It’s easy to talk about wanting to start a new business, but it’s harder blocking out time consistently looking for one. When is the best time to actually start looking for a new business? The answer always comes down to one answer: NOW.
Businesses Just Don’t Fail That Quickly
More often than not, business owners only think about starting a new business when their existing business is on the brink of failing. A business that fails overnight could be due to an unforeseen circumstance such as a weather catastrophe or it could be an immediate circumstance such as owning a high-risk business where customers or goods dry up overnight.
What many entrepreneurs don’t realize is businesses just don’t fail that quickly. There are always warning signs or certain inherent risks in the industry that are well known. Most of the businesses don’t fail due to some “unexpected event”. They failed because the business owner didn’t act quick enough, bold enough, change direction or didn’t find a fix.
I personally have never been in a situation where I was caught by surprise that one of my businesses was going to fail. I have had businesses that I decided to close down because they were not profitable enough or businesses that I just didn’t think had a bright future. In my opinion, most of the business owners I have met start looking for a new business when it is too late because they are so wrapped up in their existing business.
Look for a New Business Early
I always knew the risks of the businesses I was in, and I always had a plan if those risks became a reality. That plan often included looking into or starting a new business regardless if my existing business was doing well or not. The most fun I have had over my career has been when I took time away from my existing businesses to investigate what other businesses I could start.
A good example of this was a company I had called HEALTHCAREseeker.com. It placed Registered Nurses on long term temporary assignments at hospitals throughout the United States. Unlike some of my other businesses, I got into HEALTHCAREseeker.com when the industry was at its peak. I didn’t know it was at its peak at the time but as we continued operations, the industry/economy began to decline. We really struggled for 3 years and after a number of large losses, it became very apparent to me that we had timed the market wrong.
I had learned in a prior business that there are a lot of advantages in getting into a new business when that industry is rising and HEALTHCAREseeker.com had gotten into the downside. The old adage that “a rising tide floats all boats” couldn’t be truer, but I had a plan. I would give our company 6 months more or a loss of $300,000 and if things didn’t change then I would close up shop.
By this time, I had already started to put time into what my next new business would be if HEALTHCAREseeker.com failed. Luckily, the market changed and HEALTHCAREseeker.com went on to be on the Inc 500 fastest growing companies. However, the time I put into thinking about my next business was time well spent because it led me to start another business that worked out well.
Do You Like Your Existing Business?
Another time when a business owner should be looking to start another business is when you just don’t like or are bored with your current business. This happened to me on a few occasions but one, in particular, was when I started my second company EXPERTseeker.com.
Where HEALTHCAREseeker.com came into the market at the wrong time, EXPERTseeker.com, which placed high-end technology consultants into Fortune 500 companies, came into the market at the perfect time. The economy was about to expand tremendously and the industry demand for our services exploded.
EXPERTseeker.com went on to create a lot of wealth for me however I just didn’t like the business. I felt the business couldn’t scale very big and it required me to be the “rainmaker”, the person making things happen.
The success of EXPERTseeker.com also rested upon hiring talented recruiters/sales people at a reasonable cost, but it was a losing battle. There just weren’t enough talented people with the unique skill sets I needed plus I didn’t like a business completely based on people. I also felt that the rising tide we enjoyed was going to end. So, after 10 years in business, I could see the writing on the wall. Our days were numbered because a recession hit and our clients started sending work overseas.
EXPERTseeker.com went on for 5 more years and continued to generate good profits but that was only because I knew the right time to cut back on expenses. I started to spend a lot of time planning my next business and when I finally closed down EXPERTseeker.com, I was already 2 years into my next business.
Look for a New Business Early When Things are Going Good
You don’t need a failing business to think about starting a new business. Even when you have an existing good business, it is always a good time to look for a new business regardless if you start it or not. I never felt looking was a waste of my time.
Another company I have is a company called Financing Solutions which provides lines of credit to small businesses. In its 5th year of business, my business partner and I began to look around for a new business to start. Financing Solutions was doing well and we felt it was important to see if we could find another business since we had the time. After some research we came across an industry we liked and we started a company called Elite Funeral Funding. Both businesses are doing really well and I really like them.
Now I know what you might be thinking: “How am I supposed to look for a new business when I spend all my time working on my existing one”. My advice to you then would be to rethink where your time is being spent. Block out a specific amount of time, like 3 hours per week or 2 days per month and look for a new business to start. This will benefit you in the long run but it will also get your creative juices flowing again. Not only could you find another business to go into, but you might find that you are more energized about your current business with new ideas.
Isolation That Leads to Less Creativity
The other thing I found out about myself is that when all I do is work on my existing business, I become isolated about new ideas. The more I look at other businesses the more I stay current with new technology and ideas. My creativity and energy seem to soar for my existing businesses when I begin to look around at other businesses. It’s truly amazing how much one can get lost in working on your own business.
After starting 7 companies, I continue to refine what makes a successful serial entrepreneur tick, and to me, it has become even more apparent that a business owner should always be looking for their next business. I rarely find a business owner who hasn’t started more than one company because small businesses tend to run their course and close. You may not start that next great business idea you came up with, but the practice that one develops when looking for that next business might turn out to be the best, most productive time you ever spent.
Author, Stephen Halasnik is a serial entrepreneur having built 7 successful businesses in the $5-$20 million revenue per year range over the last 25 years. One of those companies was on the Inc 500 fastest growing list. His latest company is Financing Solutions (www.financingsolutionsnow.com) which provides Lines of Credit to small businesses and nonprofits throughout the United States.