smal busl iness
Starting up
in a downturn
Recession can spell
opportunity for
savvy entrepreneurs
By Rich Sloan
SOME DAY IN the not too distant future, people will look back on these recessionary times
and say, That’s when the smart people did XYZ.
At StartupNation, our Web site for entrepreneurs, we believe that doing XYZ means
starting up your own business, right now. In
our observation and experience, we’ve noticed
that some of the best success stories are born
in times just like these.
First, when everyone is down and out,
their needs become more urgent. Businesses
that cater to those screaming needs may be
perfectly poised to become recession busters.
Second, people are desperate for work.
That means you can find higher-quality people less expensively than ever before. Great
people make great companies, so this could
give you a huge edge.
Third, it’s less expensive than ever to get
your business off the ground. Deals and discounts abound. You can hang the open sign
far easier and faster today than in times when
vendors are fat and happy and offer fewer
incentives for their clients.
RF/PHOTODISC
being active on sites such as Facebook and
using micro-blogging sites such as Twitter (in
addition to your own Web site’s blog), you
can significantly expand your contacts and
prospects and develop interaction with them
that can lead to revenue with stunning speed
and scope. It’s like schmoozing without ever
leaving your office.
Add to that the opportunities associated
with search engine marketing, where you pay
only for qualified traffic—referred to as
“clicks”—to your Web site, and you quickly
begin to realize that spending is no longer a
guessing game with slow returns on investment. These days, you can generate instant
results with minimal money at risk.
The tech advantage
Beyond the economic realities, technology has evolved rapidly to open up unprecedented opportunities for entrepreneurs. You
can market your business effectively, efficiently
and inexpensively like never before. For example, e-mail marketing costs pennies per e-mail
and is one of the most direct, immediate and
productive ways to drum up sales. With recipients’ permission, you can send them offers
and provide helpful updates to stay in their
minds during these distracting times.
Also consider another technology-driven
game changer: online social networking. By
Boom-and-bust businesses
Here are some business types that are
particularly viable these days, keeping in mind
that you should start a business only if you’re
extremely passionate about what that business does. You’ll need that passion to sustain
you and to make you contagiously exciting in
the presence of customers, employees and
financiers.
Necessity businesses. These are must-have services, typically. Think healthcare-related businesses, automotive repair, perhaps
IT support for residential customers, financial
planning—all businesses that are required, not
optional, in order to conduct life normally.
Screaming-needs businesses. Think of
things that people urgently need in this economy. If you can help people spend less, you’re
onto something. For example, if people need
their fashion fix, maybe you can supply fashion
accessories less expensively or be an
information resource for discounted
items. We know of one entrepreneur who provides discounted
parking to people who purchase
city parking through his site.
No-downside businesses.
We’re referring to monetary down-
side here, so any business requiring minimal
upfront cost would qualify. A home-based
business with an online store fits the bill. You
can sign up for a template Web site on a pay-as-you-go basis very affordably. What you do
have at stake, of course, are your time and the
opportunity cost of having chosen not to pursue a potentially lucrative alternative path.
Proven-formula businesses. Franchises
are generally a lower risk because they’ve been
proven to work. This formulaic approach to
running a small business may be perfect,
especially if you’re spinning out of the corporate world and don’t have much experience as
a savvy entrepreneur. While it’s a less innovative path, opening a franchise location can
give you all the other benefits of running your
own show.
In these times of uncertainty, one thing
can still be counted on: Small business isn’t
going away. It’s still at the heart of the
American economy and our country’s culture. If you leverage the many advantages
available to entrepreneurs today and start a
business that fits one of the attractive categories mentioned above, the odds are good you
will not only survive, but succeed. C
Rich Sloan is chief “startupologist” and
co-founder of
www.StartupNation.com, a
leading site for entrepreneurs.
Resources
• E-mail marketing: VerticalResponse.com
• Toll-free numbers: RingCentral.com
• Online networking: Facebook.com; Twitter.com
• Search engine marketing: Google.com/adwords
• Inspiration: StartupNation.com/homebased100
The Costco Connection
Along with affordable products for small
businesses, Costco offers a variety of services such as Web site design, payroll processing, check printing and more. For details,
go to Costco.com and click on “Services.”
For more information on franchising, see the
February 2008 Connection cover story in
our online archives at Costco.com; click on
“Costco Connection Magazine,” then “Online
Archives Editions.”
