When times are tough, the best thing you can do is hunker down, keep working, and stick with the day job, right? In fact, for some kinds of business, the recession shouldn’t be a barrier to heading out on your own. In fact, tough times might turn out to be the best time to start up.
In an interview with BusinessWeek, serial entrepreneur Peter Justen put it like this:
“It's always a matter of perspective, and there's always a way to prosper during a downturn. Years ago, I went to my first boss and complained that the market was bad and I couldn't sell anything. He told me: ‘Successful people joke and laugh it off, and unsuccessful people complain about how bad the market is.’ I've never forgotten that.”
Of course, there will be exceptions. If you are planning to launch a company in a sector where the market is getting smaller and you want to create a high-cost, premium product, now might not be the best time. You should revisit your business plan, and see if there’s ways you can be more in tune with the financial times.
But even in a tough market, if your product or service meets a need, there’s always the potential to make a sale. For example, if what you are offering helps businesses to cut costs, you are going to have a receptive set of potential customers when companies all over the country are looking to pair back their expenses.
The key thing, as always, is research and preparation. Look at the area your business will be in. How big is the potential market? How much is this market sensitive to price? Can you pitch a “value” message? Can the competition compete with you on price – and if so, can you turn your size and flexibility to your advantage?
Over the next week, we’ll be looking at different aspects of starting a business in a downturn, from how to work out if your idea is a good one through to simple free tools you can use to get your business going.
Tomorrow, we’ll look at perhaps the biggest and most difficult question of all: how to raise the money you need to start out.