When thinking about starting a business, one of the most pressing questions you might ask yourself is “When is the right time to start?”. More importantly, you might want to know what the best time to start a business is so that you can better avoid failing. But what if I tell you there is no exact best time to start a business?
Starting a business of any scale requires careful planning and preparations. Important requirements for starting a business include the business model itself, capital, resources, and your plan to optimize your strengths and maximize potential opportunities in the prevailing market.
In all, the question still stands, “At what point do I start my business?” You may have started making plans and getting your required resources ready but knowing the exact time to start is practically impossible. However, I explored what business experts have to say so as to provide a clear guide that will propel you to start now without any unnecessary delays.
Recent Statistics on Business Startups
- An alarming 90% of businesses fail after startup.
- 10% of new businesses collapse within the first year.
- First-time business founders have a success rate of only 18%.
- The average startup launch cost is $3,000 in the United States.
- Payroll management is one of the highest costs medium-scale startups incur.
- 34% of small businesses’ failure results from a lack of proper product-market fit analysis.
- 22% of startups fail because of a lack of a sound marketing strategy.
- The average venture capital firm receives more than 1,000 proposals per year.
- Approximately 30% of startups with venture capitalist support still end up failing.
- Around 75% of all fintech startups crash within two decades.
- Startups in the technology industry have the highest failure rate in the United States.
These statistics are from the United States Bureau of Labor Statistics, Embroker, Small Business Trends, etc.[1]Startup Failure Rate Statistics (2024)
Important Pre-Requisites For Starting Your Business
In a recent interview with Patrick McKenna, one of the co-founders of ComeBack Capital, a venture capitalist company focused on investing in small, early-stage technology companies in the United States, he shared some useful insights on what you might need before starting a business.[2]20 Factors To Consider Before Starting a Business – Indeed These provide a step-by-step approach to finding a bearing for your new business but I will summarize only a few essential points under the following sub-headings.
1. A business plan
A business plan is technically the first thing you need before starting a business. This comprises all the cardinal points that define your business; what it is about, what services or products you are offering, and business structure.
A business plan is formally a written document of your business idea, objectives, structure, market analysis, products or services, etcetera. It is basically a written summary of your business model. While this can be tendered to a venture capitalist or investors when soliciting funding, it lays the groundwork for the successful establishment and running of your business.
It is more like your business blueprint and, according to Mckenna, should include the need, uniqueness, identity, business structure, market, and target audience.
- Need: This considers what need your business model is trying to meet. This basically answers to what your business is about, what population it targets, and so on. Of note is the fact that there will always be a business need, if not in one location, then another.
- Uniqueness: Uniqueness is what makes your business stand out from the existing businesses that are similar to it. It explores your strengths and opportunities, which are important aspects you need to think carefully about before starting your business.
- Identity: According to McKenna, identity refers to your qualities as a person that gives a boost to your business. By identifying your experience, skills, and abilities in relation to your new business, you can get an edge during the startup phase. For example, your identity might be your passion for meeting business needs, which you may have demonstrated in other similar enterprises in the past.
- Business structure: Do you plan to work by yourself (sole proprietor), a partnership, a limited liability company, a corporation, or a non-profit organization? Your business structure determines your level of control, liability, tax management, investment needs, and cost management.
- Market and target audience: This should be accounted for in your business plan. Having a more focused market audience can make it easier for you to grow your new business until you have garnered more market force.
Other important things to identify include the strengths of already existing businesses and how to find your opportunity.
2. Capital
This is otherwise referred to as startup capital because it is the money required to start a new business. While a business plan is the baseline framework for your new business, capital empowers you to achieve it, and thus, it is one very important thing to consider. Suffice it to say that the availability of capital has become a very important factor affecting when many people start their businesses.
Before starting a business, you want to consider how you would finance your startup. Do you want to save by yourself from the proceeds of other jobs, or do you want to seek financial help from investors, venture capitalists, crowdfunding, etc? Each of these has its pros and cons, so you need to carefully consider your source of capital before you start.
3. Others
This summarizes all other important requirements for starting a business that is not strictly under a business plan and funding. These requirements address the essential running needs of your business, and include the following:
- Location/siting of your business office.
- Warehouse
- Tools, equipment, and energy requirement
- Employees
- Sourcing
- Regulations/Policies
- Branding
- Marketing
- Distribution channels
- Competition
- Bookkeeping, etc.
While all of the above are important requirements for every new business, having to wait till you get everything perfectly before you start might be unrealistic and impractical. In such cases, the best time to start your business would be as soon as possible even when ‘everything’ is not fully ready.
Expert Tips on the Best Time to Start Your Business
The success of any new business depends on how it is started, which is why many people take time to find the best time to start their business. However, studies have shown that there might not be an exact best time to start a business, but factors like your level of preparedness, time of the year, your age, and others, can influence how optimal your starting time is.[3]When Is The Right Time To Start A Business? – Forbes
If you have made your business plans and achieved a significant proportion of your business requirements (not necessarily a hundred percent), consider starting as early as now when you have the thoughts.
On the ideal age to start a business, experts at Founder Institute have stated that age 28 and above is a decent age to start a firm, with 32 being the optimal age. Their argument was that people between 28 to 50 years have some expertise in management, project completion, and company operations.[4]Ideal age to start a business, according to science – People Daily However, this can faulted because it doesn’t take into account sole entrepreneurship models and also due to the assumption that younger people can’t acquire that expertise.
Another study published by Inc.com showed that entrepreneurs in their 35s and 40s are more likely to establish successful businesses compared to their younger counterparts[5]New Studies Reveal the Ideal Age to Start a Business, and It’s Not in Your 20s – Inc.com, the Global Entrepreneurship Monitor (GEM) has reported that starting a business knows no age boundaries. While ages 25 to 34 are the most common ages people start a business, we have seen successful business persons are significantly younger ages.
We have seen young entrepreneurs like Maya Penn who founded Maya’s Ideas (fashion accessories) at age 8, Moziah Bridges of Mo’s Bows, a bespoke bowtie company founded at age 9 and also recently appeared on Shark Tank and several others. Several young successful Nigerian business founders were also recognized in 2024, one of which, named Bidemi Zakariyu Akande, stated that, “It’s okay to start small and scale as you grow. You don’t necessarily have to wait for when you have all the funds you need.”
Ultimately, the earlier the better but it is never too late to start your business. Strategic planning is also very important. Start something small and grow from there. Even when you fail, you will learn valuable lessons you could never have learnt any other way.[6]Why Companies Fail—and How Their Founders Can Bounce Back – HBS Working Knowledge There is no such thing as being fully ready.
Overcoming the Fear of Failure
The fear of failing is one of the primary reasons why people want to know the exact best time to start their business, but rather than being afraid, they can focus on mitigating the challenges they anticipate. Rather than think too far into the future, focusing on the next little step right ahead of you can help reduce the anxiety.
As expected, most people fear to start something new because they are not sure of the outcome, thus very few people summon the courage to take the risks. However, it is important to understand that the risks are worth it, and by taking the right precautions, you can scale through calculated risks without crumbling.
Even when you obvious see business giants, that is, strong competitors who have a well-established market, there is no need to allow fear cripple you even before starting. Find an opportunity and exploit it. Plan adequately, and keep planning even after starting your business. You don’t have to get everything you need before you start.
To maximize your chances of achieving success in your business startup, we will explore some helpful tips in the next section.
Helpful Tips to Succeed in Your Business Startup
In addition to knowing the best time to start your business, here are other helpful tips to maximize your chances of achieving success in your new business. The 10% proportion of people who succeeds in their new business is quite a small subset but here is how you can be among the top few.
1. Define/clarify your business plan and idea
Having a clear busines plan or idea is important in achieving business success in your startup. Identify the needs you want meet and how you plan to achieve your goals.
Also, according to Jeff Bezos of Amazon, focusing on the goal rather than the competition will help you stay motivated and less discouraged whens starting your business.[7]30 Clear Signs You’re On the Path to Success – Knowseeker
2. Face your fears and start early
In one of my tweets, I mentioned that “Most of the time, starting early gives one a huge advantage” and several tweeps concurred. Starting early gives you enough time to explore, fail, and try again, which is why it is important to start as soon as you have your basic requirements available.
Think about how long it takes the major brands to reach where they currently are today. You realize that tiny drops of water are what makes the mighty ocean.
3. Do what you love or love what you do
Passion is one of the greatest strength anyone new business person can have. It is the force that moves you to go on when everything else seem to be against you.
When starting a business, consider something you love and are passionate about rather than what others say is lucrative. And if you decide to choose anything else, build your love and passion for it. Research has shown that passion can be developed even if it didn’t exist al-binitio.[8]On the Psychology of Passion: In Search of What Makes People’s Lives Most Worth Living – ResearchGate
4. Believe in yourself
To succeed in your new business, you must believe in yourself and your abilities. Irrespective of what anyone thinks, you must keep believing in yourself.
5. Be open to learning new things
Achieving success in your new business also requires you to be open-minded and willing to learn new things. These knowledge will better equip your for success than if you didn’t have them. If you have an opportunity to do something similar to your desired business, that experience will help you achieve success when you start your business.
Keep innovating, try new things, and keep improving despite how small you started. The goal is to be bigger and better than you started.
6. Surround yourself with supportive people
Supportive people are those that will encourage and challenge you to succeed. You don’t want people that will continually tell you that you are dreaming too big, or that it is impossible to achieve what you desire to achieve. Choosing to surround yourself with supportive and encouraging people will help you achieve success in your business.
7. Be customer-oriented
Customer-centredness is a powerful business ideology many successful business founders have adopted. It motivates you to always think about innovative ways to improve the quality of your services, which is an important ingredient for achieving success in business.
Actively seeking feedback from your customers will enable you show empathy when rendering your product or service. By doing so, your customers will become loyal to you and your brand, thus making you successful in your business.
8. Leverage the internet
There are a lot of tools available over the internet; social media, online productivity software and applications, artificial intelligence, etc. Leverage these to your advantage in areas of new knowledge, current information, best practices, and tips on achieving success in business.
9. Build beneficial relationships
Relationships are very important in achieving business success. Focus on building healthy and beneficial relationships. Networking with other business persons can create opportunities for potential collaboration, sharing of industry information, and other benefits. It also helps you stay relevant in your business sector.
10. Financial management
Payroll management has been cited as one of the most cost-intensive aspect of most business startups. Even if you are not paying employees, learning to balance debits and credits, allocating money properly, and self-discipline against injudicious use of funds for personal purposes, can help improve your chances of success.
11. Learn from your mistakes
Failure is only failure if you give up on trying again. Shikhar Ghosh, a Professor of Management Practice in Business Administration at Havard told Havard Business Review that preventing business failure is largely about being proactive in creating the future rather that predicting it. But when mistakes are made, you can turn them into an opportunity to innovate and achieve bigger success.
Frequently Asked Questions
What is the ideal age to start a business?
There is no single "ideal" age to start a business. However, studies suggest that individuals between the ages of 28 and 50 often have the experience and skills necessary to increase their chances of success. Younger entrepreneurs, like those in their teens and 20s, have also achieved great business success, proving that age is not a limitation.
Do I need to wait till I put everything in place before starting my business?
No, waiting until everything is "perfect" before starting a business is unnecessary and can potentially hinder the achievement of business success. While some essentials like having a business plan, seed capital, and key resources are important, you can start small and continue to improve from there as your business grows.
What are the essential requirements for starting a business?
The essential requirements for starting a business include:
- A well-defined business plan
- Startup capital (funding)
- Location (physical or online)
- Branding and marketing strategy
- Tools, equipment, and technology (if applicable)
- Distribution channels and sourcing
- Knowledge of regulatory policies and licensing
- A strong support network (mentors, industry contacts)
How much money do I need to start a business?
The amount of money required depends on the type and scale of your business. While studies show that the average startup costs around $3,000 in the United States, you can start up any buying, selling, or service business with significantly less, depending on the products or services you plan to offer.
While it is important to calculate startup costs and source funds before starting, sometimes you might need to start with what you have. With careful planning and financial management, you will be able to upscale your business in no time.
Should I quit my job to start a business?
It is not necessary to quit your job for a new business. Many successful entrepreneurs start their businesses as side hustles while maintaining their jobs, allowing them to test their business ideas and ensure financial stability before fully transitioning. You might consider quitting your job when you have developed a clear business plan, have a stable income stream, and sufficient savings that can sustain you through the startup phase.
How do I overcome the fear of starting a business?
If you are afraid of starting your business, you might need to have a mindset shift. Focus on adequate planning, preparation, and taking small steps in the right direction. Whether you are afraid of failing or afraid of the competition, it is important to focus on the need you want to meet and let it be your motivation. Surrounding yourself with supportive people and mentors can also help you stay motivated.
How will I know that I'm ready to start a business?
You may not know that you are fully ready to start but if you have the following, you may be ready.
- A clear business idea and plan
- Initial funding or a plan to acquire capital
- Sufficient knowledge of the industry and market demand
- Confidence in your skills and abilities
- A willingness to learn, adapt, and persist through challenges
What is the biggest reasons why startups fail?
Lack of market demand is considered the biggest reason startups fail. Your business model should provide solutions to a considerable number of people. Other common reasons include poor financial management, weak marketing strategy, and inability to adapt to market changes.
Is it too late to start a business at 40 or beyond?
No, it is never too late to start a business. While it may seem delayed, there are some good sides to it. This is because studies have shown that entrepreneurs in the 40s and 50s often have higher success rates than young found founders due to their experience, network, and financial resources.
Can I start a business with no money?
Yes, it is possible to start a business with little or no money. This can be via online or service-based businesses and leveraging free tools, and skills you already have. Examples of such businesses include freelancing or consulting, which require minimal upfront costs.
Is it wrong to pivot my business?
If your business isn't growing as expected or revenue is consistently lower than expectations, it might be time to pivot. Pivoting can mean changing your product, target audience, market strategy, or revenue model.
How can I get funding for my startup?
You can get funding through personal savings, bank loans/microloans, angel investors/venture capitalists, crowdfunding (e.g., GoFundMe), and grants from government or private organizations.
What is the difference between a business plan and a business model?
A business plan is a written document that outlines your business objectives, market analysis, financial forecasts, and operational strategy, while a business model is the structure of how your business creates, delivers, and captures value. The business model is the conceptual framework, while the business plan is a formal, detailed roadmap that can be presented to investors.
How long does it take for a new business to become profitable?
On average, it takes around 2 to 3 years for a business to become profitable. However, this timeline varies depending on the industry, business model, and initial investments. Service-based businesses may become profitable faster than capital-intensive businesses like manufacturing or retail.
Do I need a business license to start a business?
Not necessarily, but however, depends on the nature of your business and the location. Certain businesses like restaurants, health services, and construction require special licenses and permits, and it is important to check with your local regulation authority or government website to see the requirements for your specific industry and business model.
How can I increase my chances of success in my startup?
You can increase your chances of success by starting early and learning from mistakes, defining a clear business plan and strategy, developing financial discipline, and managing cash flow properly, while continuously innovating and improving on your products and services. It is also important to keep yourself updated with industry information relevant to your business niche.
