STARTING A SMALL BUSINESS
November 7, 2011 
10 Comments
Starting A Small Business In This Recession
Starting a small business is a real challenge. It is a test of will, skill, determination and desire. Most normal and rational people would not consider starting a small business in this recession. But of course, if you are like me, than you are not normal, although you probably have been accused of having temporary fits of rationality from time to time.
Starting a small business requires you to focus on exactly what you want to deliver to your customers. A vague idea about what you will offer your customers, or for that matter, an even more vague idea of who your real customers are can deep six any business startup, particularly in a recession.
Interest rates are dropping, and so is the availability of credit. Consumer confidence is declining, and so is everyone’s spending ability. People cannot spend money that they do not have – particularly when their credit cards, home equity lines, and margin accounts are no longer available to fund that spending spree. This is just one of the traps that lay in wait for you when you are staring a small business in this recession.
There are some great opportunities that occur in recessions. Remember, when things go bad, a lot of people lose money and assets. Many people will lose their homes, their savings, and their dreams. Recessions and economic downturns do not destroy wealth – not completely – they transfer wealth.
Wealth transfer happens all the time. People who thought that the Internet stocks would always go up in value transferred their wealth to those who knew better and bought some solid stocks for little or no money. Those stocks rebounded years later – creating wealth for the “opportunists.” The housing crisis that started this recession is creating the same types of opportunities.
People are losing their homes and others, who are the current opportunists, are buying these same properties at deep discounts. The banks that made loads of money a few years ago selling and financing these properties are now only too happy to get some return on their investments to stem the losses.
This period of fear, uncertainty, chaos and doubt creates huge opportunities for those starting a small business in a recession. It is during this period that people want help. They want something that is certain. They want something that they can depend on. They want hope!
You are starting a small business in a recession. You are a poster child for hope. Many people, particularly friends or family will think that you are crazy. They will think that because they are struggling that you should be also. The will project their problems and their situation on everyone else. You can counter this by focusing your sense of hope and positive can-do attitude, (if you don’t have this – don’t start a business), on them.
Your target customers will all want some type of hope or reassurance in these tough times. You are the entrepreneur who took the risk, wears a smile, and fulfills their wants (not needs) are the perfect example for them to look up to. Be positive and give them great service, and let them know that no matter how bad things get, they can count on you.
So, after starting your business in a recession and identifying your target market and servicing their needs you will have great days and you will have terrible days. Attitude makes the difference. Be aggressive in marketing and sales. Create an image that resonates with your target market. Monitor this image carefully because you will rely on it heavily from time to time.
Find out all of the info that you can about your competitors. Your competitors, at least some of them, will be caught up in the negative momentum of the recession. They will initially view it as a distraction, then an impediment, then an obstacle, and ultimately a crisis.
You want to be very prepared, because when your competitor sees an obstacle they trip, when they see a crisis they fall. When your competitors fall, they tend to do something that their customers do not like. Exploit this – remember recessions are about wealth transfer and customers are a type of wealth.
Starting a small business in a recession is tough, but can lead to huge success. It requires a positive attitude, a laser like focus on serving your customers, and the ability to exploit your competitor’s weaknesses. With the right preparation starting a small business in a recession can be the most rational decision that you ever make.
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Is it best for a mother and son starting small business out of the home be unincorporated or corporated. THX?
I bought a water shed truck for my son . We will sub-contract it out for Fire season. He will drive and of coarse operate it, I will manage the contracts and work locations from home. Applications for Fictitious names and business licenses ask if this small business is a Corp or Unincorporated. What is best? Thank you.
As a retired contractor that was incorporated, and without knowing the particulars of your endeavor, I would not even consider incorporating. Incorporation is not only expensive it will cause you to have many unnecessary expenses such as a board of directors, making yourselves employees which would need payroll deductions, work comp and much more. One of the few myths you hear about is that you as a stockholder can not be held responsible for the corporation’s debts, but if you are going to need to borrow money from a bank they will require a personal guarantee which leaves you holding the bag anyhow. Before making a decision of this magnitude, I would seek the advice of a competent CPA registered in your state.
Wheels
What is the most effective and cheapest way to create a website for a starting small business?
I am in the beginning stages of starting a business and want to create a website to attract customers. I want it to be very well organized and be easy to navigate. Any products out there that could help with this problem? Any help would be really appreciated.
Question: Where to create a website that’s… effective, cheap, well organized, and easy to navigate.
You might want to try SBI. I have an extra package listed on ebay…
http://cgi.ebay.com/Site-Build-It-SBI-Website-Subscription-Web-Business_W0QQitemZ220116220577QQihZ012QQcategoryZ102485QQrdZ1QQcmdZViewItem
Note: I’m working on my second website.
My friend has a motorcycle site with SBI and seems
happy. You won’t need to know that techie stuff like ftp, html, rss, etc.
Robert
Resumecrazy
Sole Proprietorship or LLC for starting Small Business?
I’m planing on starting a small business for myself. Nothing big i’ll the only worker/owner of the business so its going to be a small place. My question is which would be best for a starting business? Which should I start it out as a(n) Sole Proprietorship or LLC, and why?, or if you have another one for me to start my business, which one and why?
http://vistaprint.tellapal.com/a/clk/Mn7xc
whatever u decide 2 do you should get them from this site because they give u stuff for FREE!! it has their website written on the back of some of the stuff very tiny but not everything & u pay shipping and handling and its a few dollars if u get 21 day shipping but i always get my stuff in about 10 days. you can order up to 10 free items and they have a lot of specials if you actually have a business its great! i just got an order today for my website http://www.TheKinkyBoutique.com with 250 business cards, 140 address stickers, 100 adorable big post cards that were great quality, one mug, and 1 tee shirt all for $12 shipping, and i got 5 bucks off for referring someone. you get $5 everytime someone you refer buys something. you can choose gift cards for the cash or else use them for vista bucks.
starting small business, should I keep reciepts? What about tax writeoffs?
I’m starting a small biz. I’ve started a speadsheet, writing all my expenses and every purchase, now that I’m working for myself.. I’m trying to see where I can write off business expenses, so I’m not taxed for that amount. Can you give any advice? Do I need to keep every receipt? What do I need to do?
Absoutely keep your recepts in case of an audit. Keep the spreadsheet for easy viewing for you. Office stores sell these collapsable files with the months on them. Get one for every year and stash receipts there for easy storage. Remember, to keep those receipts for 7 years because the IRS can go BACK and audit previous years. But, remember, receipts alone are not enough. Document why you needed something as well in case the IRS questions a purchase, thats where quickbooks or Execel is handy!
Starting small business, company just registered. What to choose:business debit card from Chase or BofA?
Starting a business, company just registered. What to choose: business debit card from Chase or BofA?
Should I apply for a business CREDIT card as well if I’m not sure business go well?
Thank you.
If you answer, don’t put links to other sites, please. It will be reported.
Thank you.
Get a Small Business line of credit, many banks are offering it now days. Chase is my preference.