Open my own business ... now? Despite what you may think, starting your own business in a recession offers opportunitiesJoseph R. CardamoneUnited States Federation of Small Businesses, recession
Often times, the monotony of punching the clock as someone
else's employee leads to day dreams of starting a business and
being your own boss. In rough economic times, those day dreams may
never pass beyond imagination. "Times are tough, how could I start
my own small business now?" one thinks. That's rational thinking,
but, counterintuiviely, a down economy can actually create great
opportunity for budding entrepreneurs.
There are a variety of benefits to starting a small business
during poor economic conditions. For starters, office rents could
be lower and suppliers may cut better deals. Downturns are a great
time to sign new accounts. Customers are examining every expense
for ways to save, including asking eager entrepreneurs for price
bids in order to replace current and expensive vendors.
An unfortunate reality of hard times is increased unemployment.
But, for small business owners, this means more experienced talent
is available in the marketplace, with more affordable salary
requirements.
However, as you can imagine, the grass isn't all green for
entrepreneurs making a start in a down economy. It's tough, very
tough. A down economy means tighter lending standards, higher
prices on energy and food and weak consumer spending. Like those
millions of entrepreneurs who started a business during the
recession of the early 1990s, today's dreamers need to ask
themselves if they have the appetite for risk and fire in the belly
to succeed as a small business owner. For those inspired to give
entrepreneurship a go, here are some quick tips for starting a
small business in poor economic conditions:
Avoid the middle market products and
services
Even in a down economy, consumers and businesses need
necessity-based products and services--office supplies, tech
services, food, medical assistance, waste management, etc.
Conversely, an innovative luxury item can also be successful. Avoid
the middle ground; if customers can delay purchase while times are
hard or choose a less expensive alternative, thats not the industry
to be in.
Don't fret the big bucks
If start-up capital is an issue, consider starting a part-time
business. Keeping a day job for a while can help maintain a steady
income while waiting for sales from the new business venture to
kick in. Its also a smart way to work out kinks, gain industry
knowledge and build a solid customer base without superfluous
financial stress and pressure.
Make equipment multitask
Technology products are getting smarter and helping people
streamline. Many printers can also scan and fax. Another printer,
the DYMO LabelWriter printer, both prints a variety of labels, and
enables users to purchase postage online through DYMO Stamps. This
enables professional looking mailings, without the commitment or
expense of leasing a postage meter, all while saving trips to the
post office.
Strategize staff selection
Minimize full-time staff. Hire part-time employees. Contact the
local college or university to see if they offer a formal
internship program. In some states, interns can work for free or
class credit only. Outsource or hire freelancers who can take
overflow work or specialty jobs. Don't invest precious resources
employing people who may be underutilized. As business grows, you
can consider adding more full-time employees.
Embrace the guerrilla
Don't spend a fortune on advertising. Use guerrilla marketing
techniques to get the word out. There are hundreds of free or
inexpensive ways to do business promotion: Distribute free product
to attract people and secure repeat customers. Write a column for
the local newspaper. Get involved with your local chamber of
commerce. Network with other area business professionals. Display
the company logo on a vehicle.
Buy the business
Many businesses for sale are completely viable; the current owner
has simply run out of time, energy or entrepreneurial passion.
Although it may cost more up front, the purchase of a business can
provide an existing foundation and income stream--ready to be
nurtured and advanced to a higher business level.
Anytime can be the right time to launch a venture if the
opportunity is right. During periods of a challenging market, big
companies suddenly don't take any risks; they retrench and bunker
down. In contrast, entrepreneurial start-ups, small and agile, are
out reinventing models. Great ideas, some savvy business sense and
a passion for self-employment can overcome any type of economy.
Good luck!
Joseph R. Cardamone is president of the United States Federation of Small
Businesses (USFSB). Founded in 1983 by small business owners,
USFSB advocates for the rights and interests of small businesses
and the self-employed. Their mission is to help their members grow
and prosper by joining together and effectively promote small
business interests before local, state and federal lawmakers. He
may be reached at (800) 637-3331.
