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Question: Does the recession mean that now is a
bad time to set up a business?
1st April 2009
Harry Parkinson, Managing Director of Close Invoice Finance
in Ireland.
Not necessarily. On the face of it, starting a business in a recession sounds
crazy. But provided you choose the right type of business and go about it in the
right way, you can still succeed. And if your business can thrive in a
recession, think how it will soar when the good times come again.
There are in fact many advantages to setting up shop in a recession including
equipment and office space being cheaper, being able to hire more and better
qualified people, and the tax incentives from ownership.
However, one of the major stumbling blocks for start-up companies in a recession
is that they can find it extremely difficult to obtain finance. They tend not to
have sufficient assets to provide security for traditional bank lending.
This is where invoice finance can offer a lifeline to start-ups who will be
eligible for funding, not on the basis of their assets, but on projected monthly
sales and net worth.
The central premise of invoice finance is that it allows companies to raise cash
quickly and easily against their sales ledger, allowing the invoice/payment
cycle to keep spinning without interruption.
So, my advice would be that if you have a good proposition which you can finance
— and you have the drive, energy and passion — go for it!
Article featured in
Ulster Business Business Clinic
