If you have considered going into business for yourself, there is no time like the present. The rough economy should not be a deterrent. More than one half of the current Fortune 500 companies were launched in a recession! In fact, the advantages of starting up in this economic climate are significant a shift in consumer priorities, lower costs on services and products your company will need, cheap but high quality employees, an inherent emphasis on solid financial management. Heck, nearly 10 of us are unemployed anyway, and spending time developing a great business idea makes far more sense than arm wrestling a 16 year old for the one available counter position at Starbucks! Startups in a down economy tend to have a good track record. Although counterintuitive, the environment of a recession offers significant opportunities to go out on your own.
Consumer Changes
Consumers attitudes toward spending change. Finding a good value becomes more of a priority. Whatever your business idea, good planning will reveal at least a dozen ways to offer a better value than your existing competitors while still turning a good profit. Most existing businesses that struggle and close in a recession do so because they failed to plan ahead. They do not have appropriate tools in place to identify threats and mitigate damage. A well planned startup will already be a lean, efficient machine, poised to grab up the market as the competitors scramble to survive.
Consumers priorities also change during bad economic times. The going back to basics trend is a given when money is tight. This shift always opens the door to numerous industries and niches that may not be as easy to launch in a strong economy. By establishing a customer base now, these startups will be going strong once the economy improves. New business ideas and models emerge from every downturn pay attention to what you see and hear from others and be creative. The next big thing may be your brainchild!
Startup Advantages
Some experts argue that startups suffer in a bad economy because they are unable to charge enough for the products or services. While you do need to offer a good value to your market, remember that you will be able to find great deals from your suppliers during this time as well. Everyone s sales are down, so most suppliers are offering better prices, free delivery, better terms or other incentives. And, with nearly one in ten unemployed, it is far easier to find a skilled professional in any field (accountant, webmaster, marketing guru) at an affordable price. Those struggling to find work are happy to join up with a venture with potential often for far less salary than they would expect from a corporate job offer.
The biggest advantage to starting up in a down economy is the culture your venture will develop. In most cases, a startup during a recession means less capital to launch with which, in turn, leads to more creative, cost effective methods of dealing with overhead and driving sales. New businesses that find the way to succeed in a tough economy tend to have better financial controls in place. Because they start out watching the pennies, that attitude becomes a standard part of the cultural foundation of the business. A culture of no waste makes it easier to plan ahead for growth and, if necessary, to survive the next recession.
Start Now
If you want to start your own business, start now! Take the time to thoroughly plan your idea by making a virtual road map of your venture. Figure out the best options for every aspect and begin putting the pieces in place for launch. Every business takes time to build profitability, and by starting now, your venture will be well prepared for explosive growth when the national economy recovers.
Author Resource:
K. MacKillop, an entrepreneur with a J.D. from Duke, is co-founder of LaunchX LLC and authors a business startup blog. The LaunchX System, a five Unit series of step-by-step business startup procedures, key software and more answers the question, "Where do I start?" Visit http://www.LaunchX.com .
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