When my wife and I sold our house to fund a web design company, we made a huge mistake. Not because we flushed 40 grand down the toilet (although I still have nightmares about that part of it), but because our timing was way off. We started our company one year to the month after 9/11/2001, which was a huge mistake on our part for two reasons. First is the obvious shock to the economy that came about as a result of 9/11 and second, the ripple effect of the dot com bust was still being felt.
According to a 2003 advocacy report by the Small Business Administration, the “unemployment rate climbed from 5.8 percent in 2002 to 6.0 percent in 2003,” banks had stiff lending standards in 2002 and the recession of 2001 had not yet ended. It was only at the end of 2003, when my business had all but failed and I was already looking for work, that things started to pick up for small businesses. But by that time, I had such a bad taste in my mouth after losing 40 grand that the idea of staying in the fight wasn’t at all palatable.
But that brings me to the irony behind this post. I’ve actually gotten more requests to build websites for people in the last month than I got during the second half of the year that I owned my own web design company. But rather than start another web design company, I’m doing these jobs as an independant consultant. And because of all the recent work I’ve been getting, I’ll be able to get me one of these a lot sooner!
So what have I learned? Never start a business in the middle of a recession and never, ever sell your house to fund your startup. I suppose I shouldn’t be so hard on myself, at least I gave it a shot, right?