The Start-up Solution: Seven Tips to Help Job
Turn This Economic Bust into a Small Business Boom
These tough economic times have many Americans looking for work--and looking
for more ways to make ends meet. Author Ed Hess has some advice you might
not expect to hear right now: Start your own business!
First, forget the idea that you're giving up
"security." (There's no such thing.) The idea of going it alone can be a
scary proposition regardless of how well the economy is doing. But the same
things that can happen to you can just as easily happen to some big,
established company. The harsh truth is that your work life expectancy in
Corporate America can be pretty uncertain these days. The National Bureau of
Economic Research recently announced that since the recession began in
December 2007, 2.7 million people have joined the ranks of the unemployed.
As layoffs in the hard-hit banking industry continue to be announced and
with the uncertain future of the U.S. auto industry, that number is sure to
Start small without risking a lot of money. This is good advice for
any worried entrepreneur, but it makes even more sense in a sluggish
economy. Starting small gives you the ability to test the job market while
you get your business off the ground. It also means you can "test drive"
your idea without making a full financial commitment. If business starts to
pick up, you can make the decision to transition into a full-scale
company--or, if you find a job while you're testing the entrepreneurial
waters, you can keep your new enterprise small and use it to make some extra
money on the side.
Find out exactly what your customers want. Before you pour a lot of
money into getting your business off the ground, do your due diligence by
talking to as many potential customers as possible. Customers know what they
are willing to pay for. Ask them what they want out of the product or
service you'll be focusing on and find out how your would-be competition is
missing the market in delivering it to them. In fact, Hess suggests that you
go to your competition as a potential customer so that you can see firsthand
what their real customers experience.
Seek the advice of experienced entrepreneurs. No one provides better
mistake-dodging advice than small business owners who have already weathered
their share of economic ups and downs. Seek out entrepreneurs in other
cities or those who serve a slightly different market segment than the one
you're planning to target. Ask them what obstacles they ran into when they
were getting started and find out what they are doing to keep their doors
open during the down economy.
Finance your business yourself. It's true. Lenders are no longer
handing out small business loans like candy. But if the inability to get a
small business loan is keeping you from going out on your own, know that
there are other options out there. One alternative to financing is to take a
look at your savings to see what you can put toward the business without
incurring too much financial risk--typically, around 20 percent of your net
Take advantage of the flooded market. These days you can get better
things cheaper. If you are a small business owner looking for employees,
you'll likely be able to hire more skilled workers for less money than they
might normally accept. Maybe they desperately need the work, or maybe they
just understand that slow economic times mean lower salaries (and they trust
you'll make it up to them when the recession is over). When you want to
expand your enterprise, you may also be able to get a good deal on an office
lease or storage space. The real estate market is suffering right now, so
more and more property owners are looking to make money on their properties
any way they can.
Provide unbeatable customer service. One area in which a small
business should always excel is customer service--good economy or bad. But
when things are down and customers have less money to spend, they really
care that they're getting a lot of bang for their buck. They'll also be
looking to cut out those businesses that aren't meeting their needs. As a
smaller company, you'll have an advantage over larger competitors because
you are better positioned to provide consistent, outstanding service. Small
businesses just tend to be more flexible and can "turn on a dime" to meet
client needs as they arise.
"The economy is getting a lot of blame these days for sinking businesses,"
says Hess. "I'm not saying it's not making things harder for some
companies--it certainly is--but it isn't a deal breaker by any means.
Sometimes it's just a convenient scapegoat. When it's based on a good
business opportunity and backed by commitment and plenty of old-fashioned
hard work, a small business can do quite well during tough times.
"In fact, people who launch start-ups tend to be more passionate about their
work than those who just go in for a paycheck," he adds. "And passion goes a
long, long way toward success. So, if you want to start a business--even in
today's bad economy--take the necessary steps to ensure it's a viable
opportunity, and get to work."
About the Author
Ed Hess lives in Charlottesville, Virginia, and spent most of his business
life advising entrepreneurs and financing their business ventures. He went
to college at the University of Florida and to law school at the University
of Virginia and graduate law school at New York University. Ed's
professional career was spent with firms like Atlantic Richfield Company,
Warburg Paribus Becker, Boettcher and Company, The Robert M. Bass Group, and
Andersen Corporate Finance, and he has built three service businesses. For
more information, please visit