(Part 1 in a 3 part series)
Even though we face a poor economy, these same conditions also make it a great time to start a small business. Suppliers are willing to take lower prices, consumers are looking for better deals and more value, and social media provides the budding entrepreneur a long list of low cost marketing tools to choose from.
Brad Sugars, founder and chairman of ActionCOACH, summed up the many benefits of starting a business in a recession in an article he contributed to the February 2009 issue of Entrepreneur magazine (www.entrepreneur.com), including:
Everything is cheaper.
Let's face it: There is great value right now in this and in world markets. This is the right time for fantastic deals in virtually every category, from land and equipment to commercial office space, personnel and labor. As asset prices have been knocked down, there is no better time to get into the real estate or financial markets, or even heavy equipment and construction. Some people have waited years to find value in these markets--and now that time has come.
You can hire more and better-qualified people.
In an era when even Microsoft is laying off, you can find great resources at affordable rates. Thinking about getting your high-tech startup off the ground? There are plenty of engineers waiting to be hired. Thinking about forming a professional services firm? There are many accountants and attorneys looking for their next opportunity.
People are looking to change suppliers.
From a cost perspective, everything is on the table for most companies. Even if your prices are higher, if you can come in with greater value, you have a good chance at winning new business. You also have the advantage of being the new kid on the block when it comes to pitching your products and services. Many companies are desperate to find new partnerships with new companies that have a different, better or more innovative way of delivering those products and services.
Ownership equals tax incentives.
Business ownership offers a variety of tax benefits that aren't available to employees. While taxes should never be the sole reason to go into business for yourself, it should be one reason to add to your "benefits of business ownership" list.
Family and friends don't want to (or can't) invest more money into the stock or real estate markets.That means they may be willing to finance a portion of your new venture, or the expansion of an enterprise that has proven itself over time. The main benefit is that they know you and have a relationship with you--and if you have a solid business plan that delivers real numbers, your chances of raising the capital you need increase exponentially.
Suppliers are giving better credit.
Because the credit markets have virtually shut down, the B2B credit flows are keeping money circulating out of sheer necessity. That means a bullish outlook for companies looking for good terms on stock and/or inventories. The main advantage is that all parties have more incentive than ever for finding true win-win situations that allow for cash and stock flow. When everyone is looking to survive, great deals can be had.
You can get good PR by showing you are going against the trend.The media loves aberrations, and if you are optimistic by expanding or getting into business now, you would be in that category. That means you can generate some great PR by demonstrating your "alternative" view of the market.
You can buy everything you need at auction.In addition to everything being less expensive, you can find great deals at auctions, especially in terms of any large equipment and office furnishings. Auctions are also a great place to find hardly used or "gently" used restaurant and bar supplies at great prices. These days, you may even be able to get deals on fleets of vehicles and trucks for a delivery service or hauling or construction company.
You can find great "low money" or "no money" down deals.This is simply being aware of good opportunities others have buggered up, and finding deals where you could get an entire business simply by taking over a lease (along with all the equipment). Many business owners want out at any cost, meaning you can negotiate great win-win deals that allow the current owners an escape while giving you an opportunity to turn around what could be, if run right, a very viable business, and finally…
You've lost your job, and you have to do something.Sometimes, the best business decision is the one you are forced into, and the incentive (as well as need) for income is often enough to push those previously "on the fence" to strike out on their own. There's nothing wrong with being in this position; it simply means there is greater urgency to do something that will start to generate income as quickly as possible.
Of course there are many benefits to owning your own business rather than working for someone else including:
- Be your own boss
- Personal independence
- Flexible hours
- Ability to work from home
- Pay for performance
- Unlimited earnings
- Potential tax benefits
- The Entrepreneurial Mindset, Turning Problems into Profits
- 11 Hot Small Business Ideas You Can Start While in College
UNM offers a wide range of courses to choose from to begin your entrepreneurial journey. Be sure to schedule an appointment with your Admissions Counselor to explore the many options available to you.
Stacy A. Sacco, Lecturer I, teaches MGMT 384 Professional Selling and MGMT 324 New VenturesStrategies in the Entrepreneurial Studies track and is the Associate Director of the UNM Small Business Institute. Sacco previously served as a Regional Manager for WESST, an SBA-funded nonprofit and microlender that helps start and grow small businesses and hosts a small business incubator in downtown Albuquerque. For more information, contact Stacy at firstname.lastname@example.org or 505-277-1138.