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June 20, 2008

The Best Time to Start a Business

Murray Low
Director, The Entrepreneurship Program
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Should we really be encouraging students to start businesses early in their careers?

I must admit that while my instinct has always told me yes, there have been moments when I wondered if I was right. While our success rate is similar to that of the venture capital industry as a whole, not all of the students we have encouraged to found businesses have been successful.

So in the spring of 2006, some colleagues of mine and I decided to collect some data. We wanted to learn about the entrepreneurial careers of Columbia Business School graduates so that we could know how to serve them better during their time as students.

After analyzing the survey results, we found that the answer to the question of when best to start your own business is not straightforward.

For our survey respondents, starting a first business two to five years after completion of business school led to the creation of the most successful businesses in terms of revenue. However, starting earlier than that was strongly correlated with starting multiple ventures — which was an even more important predictor of success.

The thousands of unique stories that lie beneath these results, all reveal that learning by experience is hard but unavoidable. We’ve found that students learn best when they are working on real projects, and that combining academic and practical experience while in business school can minimize the pain and maximize the gain of entrepreneurial endeavors. We seek to combine the best of academic and practical experience.

Becoming an entrepreneur is a very personal decision, and the right time to start a business is when it’s right for you. On average, 90 percent of the entrepreneurs we surveyed felt it was a good professional decision to start their business when they did; only 10 percent regretted their decision.

But regardless of what the timing may be, there is ultimately nothing more satisfying than running your own company and being master of your own destiny.

Next Week: What to Consider When Starting a Business

Comments

by Mayank Yadav | August 15, 2008 at 8:06 PM

The fact that there is no perfect time to start a business is subject to the persons ability to fulfill his entrepreneurial dreams. We can never inetrerpret in way that we need to go to a good bschool to start a business. It might be better put forward as " business school helps in honing a persons strategic and entrepreneurial ideas. The best time to start a business is when you know its right to start it . I completly agree its all about your instincts.

by Bernard | August 27, 2008 at 11:18 AM

While there may never be a "right" time to start a business, one area B-Schools can help future Entrepreneurs in, is evaluating potential opportunities, not just managing them. Developing better analysis skills can impact both, the timing of starting a business, and the success of it.

by Lehana Singh | October 07, 2008 at 2:36 AM

Yes, it all depends on your basic insticts. But as Bernard have rightly pointed out you cant eat the pie if you dont know how to cut it or where is the knife. So, a B school helps in evaluating 1. whether the Pie on the table is sweet or not without eating it.......funny situation ......just try 2. Finding the knife...... 3. How to cut it..........so called tools of business..... 4. How to eat it to extract the maximum ........taste and energy ( though not always ).................a kind of maximising profits and prospects. when I was in my undergraduate, we conducted a survey " Who dont want to be an entreprenuer" To our surprise only 2 out of a class of 90 students........every one else want to get the feeling of ownership of a company ........ What does this signify ..... Its the basic risk taking attitude that matters the most as all of them wont be willing to take that risk.. So, best time to start the business is when your risk appetite permits it to On humourous side......... You will try to eat the pie when you could dodge away your fears that the pie may be rotten or there is something else on the table lesser riskier ...........which include your current job and setup............. DARE TO TAKE RISK

by Tochukwu Ezeani | October 24, 2008 at 6:17 PM

Business school undoubtedly helps to hones one's skills but being enterprising entails combining local knowledge with your business acumen

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