Despite what you may think, starting your own business in
a recession offers opportunities.
Often times, the monotony of punching the clock as someone
else’s employee leads to daydreams of starting a business and being your own
boss. In rough economic times, those daydreams may never pass beyond
imagination. "Times are tough, how could I start my own small business now?"
one thinks. That’s rational thinking, but counterintuitively, a down economy
can actually create great opportunities for budding entrepreneurs.
There are a variety of benefits to starting a small business
during poor economic conditions. For starters, office rent could be lower and
suppliers may cut better deals. Downturns are great times 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:
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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, that’s 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. It’s 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. 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.
Any time 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.
