Start Now: 4 Reasons to Start a New Business in a Slow Economy

November 27, 2008 at 12:05 pm 8 comments

yef-logoHere is an exclusive pre-release article by Julie Carney, Program Manager at the NFIB Young Entrepreneur Foundation. This will appear in NFIB’s upcoming magazine.


Start Now

4 reasons to start a new business in a slow economy

The signs of a slumping economy are all around us; rising food prices and tighter lending are just a few of the challenges facing Americans. So where does this leave aspiring entrepreneurs? You may be tempted to put your business plan on hold, but don’t file it away just yet. First, consider these advantages of starting up in a slow economy:

1. There’s less competition. If you’re scared to open a business right now, remember: So is everyone else. By starting up now, you could beat a number of your would-be competitors to the punch. Less competition can help in other ways as well. If your bank is dealing with fewer business loan applications, yours may be approved faster. Or if things are slow for your local newspaper, your press release has a better chance of being picked up.

2. You’re forced to make smarter financial decisions. Starting a business now—when there aren’t a lot of funds to go around—means you’ll be more likely to cut unnecessary expenses and stretch every dollar. If conservation is your game plan from the beginning, then you’ll set yourself up for success in future slowdowns.

3. Your business has time to develop. Before growth comes research and development. This trial-and-error phase can last a few months or even a year. You’ll be making mistakes and figuring out strategies to improve. Going through these awkward beginning stages during a slow economy can be ideal. By the time customers have more money to spend, you’ll have operations running smoothly.

4. Good deals are out there. A slow economy might help you get a better deal on your necessary startup expenses. Office parks in your area may be lowering rates, or you might be able to negotiate a better deal on ad space in some outlets. If you need a vehicle for your business, the auto industry’s losses can be your gains in how much you save on the purchase.

By Julie Carney

Julie Carney is with the NFIB Young Entrepreneur Foundation, www.NFIB.com/YEF.

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For more resources about staring and growing business in a down economy, see the following links which we found on the WE-Inc newsletter:

Success Magazine: Growing a Business in a Down Economy

Darren Hardy Video on Success.com: How to Make Money in a Down Economy

For suggested classroom exercises, see the following posts:

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post #2

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post #4

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8 Comments Add your own

  • [...] You’re forced to make smarter financial decisions. Starting a business now—when there aren’t a lot of funds to go around—means you’ll be more likely to cut unnecessary expenses and stretch every dollar. If conservation is your game plan .. Original post [...]

    Reply
  • 2. business strategies | Sun Microsystems  |  November 28, 2008 at 3:57 am

    [...] Start Now: 4 Reasons to Start a New Business in a Slow Economy 3. Your business has time to develop. Before growth comes research and development. This trial-and-error phase can last a few months or even a year. You’ll be making mistakes and figuring out strategies to improve. … [...]

    Reply
    • 3. kathykormanfrey  |  March 4, 2009 at 1:25 pm

      Thanks to Sun Microsystems for that direct link – or, thanks to whoever is writing about Sun Microsystems for that direct link. Hey everyone, did you know Sun is famous in the social media world for encouraging its employees to blog? How cool is that?

      Reply
  • 4. Gopal  |  November 29, 2008 at 3:12 am

    It is always good to want to start your own business but I agree that in light of recent world economic events the timing couldn’t be better.

    Being a salaried employee in today’s economy where job security is a rarity is just not that appealing. It will never keep you comfortably ahead of your y expenses in the long run, even if you are as diligent as possible because the system is rigged to keep the masses down.

    The world’s economy is getting increasingly dire all the time with skyrocketing food, oil, and housing costs. The disparity between rich and poor is always getting larger. Salaried employees and hourly wage earners are the foot soldiers who are taxed to death while making a select few rich. As the saying goes ”the house always wins”.

    Work smart and make your money work for you. Owning your own business gives you the best incentive to work and also offers you a multitude of business-related tax deductions so you can keep more money in your pocket and re-invest it into your enterprise.

    All the best to everyone with an open mind, and thanks again for reading! G

    Reply
    • 5. kathykormanfrey  |  March 4, 2009 at 1:23 pm

      Gopal – interesting comment and like the global economic client add-in. Sure, at the end of the day, who do you rely on more – someone else, or yourself. I have friends on Wall Street whose has declined millions. So, they still have a job – but, it does make me wonder, what could they be doing out there on their own – using their smarts to help others, and without all the major overhead in between the top line and bottom line.

      Reply
  • 6. John  |  December 5, 2008 at 1:40 pm

    Starting a business in a slow economy could be risky, but it could also be very beneficial. Good points, good post.

    Reply
    • 7. kathykormanfrey  |  March 4, 2009 at 1:22 pm

      Thanks to franchise opportunities for this post. I’m sure you’re aware that franchises supposedly have a lower failure rate than “normal” businesses, or, as I’ve been told by Brian Scudamore of 1800GotJunk. It makes sense to me, because a Dunn and Bradstreet survey shows 96% of small business failures are attributable to managerial incompetence, and, franchises take and theoretically perfect part which is their offering to franchisees.

      Reply
  • 8. Sophie  |  January 8, 2009 at 11:35 am

    This is a really interesting post by Julie. I think fundamentally, new business owners need to tap into the knowledge experts of their industry. Hook up to a mentor.
    Brian Martin, CEO of Brand Connections, has a great three part blog post on http://www.brandfasttrackers.com about how to start off on your own slowly. Great read and insight.

    Reply

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