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Is it Good Business to Begin a Company in a Bad Economy?
by Dave Thomas Thu, 08/04/2011 - 11:23
If you have been thinking about starting a new business, perhaps you are feeling like now is not the time given the economic pressures many countries continues to face. Then again, you may think what the heck.
For individuals who have been laid off, been out of work for some time, have a job but wanted to open a business, etc. now may actually be a great time to roll up their sleeves and dive right in.
While the numbers may indicate otherwise for example in the United States – the U.S. Small Business Association (SBA) notes approximately 50 percent of all newly started companies go under within the first five years of operation – starting a business now is not the end of the world.
Among the ways to succeed when times are tough:
- Have a well-defined business plan in place;
- Keeping startup expenses low;
- Positioning your business to take advantage of when the economy gets better;
Make Plans to Succeed
It is important to have a well thought out business plan so that you’re not adrift just a few months into your new venture.
The goal here for small businesses is to locate a need for consumers in the marketplace and quickly fill it. Your company needs to find its niche, do it like no other can, and always be thinking one step ahead of the competition.
Secondly, do not go into this job without the right amount of financial backing.
Experts often advise those wanting to start a small business to begin it on the side while still being employed full-time. By doing so, you keep a regular income as you zero in on growing your dream. If you are thinking about dipping into your savings, a word to the wise be cautious about how much you take out. The last thing one wants to do is deplete their savings account and throw it all behind a venture that stands a 50-50 chance at best of succeeding.
New startups also need to make sure they have all the necessary licensing and/or permits, along with insurance to run their business. Do not wait until the business is up and running to determine if all the necessary paperwork is filed with government officials where you reside.
Lastly, be sure to advertise your business so that it has maximum exposure.
The startup should be advertised through as many sources as possible without spending inordinate amounts of money. With more people going online these days, be sure to take advantage of social media (Facebook, Twitter, LinkedIn etc.) to gain as much publicity as possible. In the event your online advertising skills are suspect to say the least, find someone who is Internet savvy to assist you in this area.
New business owners can expect to do a lot of the heavy lifting on their own initially, hoping to later hire employees as need be. One area to try and take advantage of here is using family and/or friends to assist with the business until you are able to hire paid staff on a regular basis.
Starting up a new business when the U.S. unemployment hovers around 9.2 percent, many businesses are closing due to low sales and/or high rents and forecasts offer mixed results at best, can be daunting.
On the other hand, now may be the best time to venture out from beyond your security blanket and take a stab at something you have been dreaming about your entire life.
About the author
Dave Thomas writes for a variety of websites on topics such as human resources and running a small business.