The economy is in the tank and if you’ve been downsized, laid-off, or just plain fired, you may be thinking that now is the best time to try your hand at starting a business.
There’s just one tiny problem: the recession.
Don’t worry. A worldwide economic slowdown doesn’t mean that you have to put entrepreneurial aspirations on hold. In some ways, now is the best time to strike out on your own.
“Lots of people get what’s called a ‘negative push,’ where they didn’t go out to start a business, but found themselves laid off or downsized,” says Bill Dunkelberg, an economics professor at Temple University in Philadelphia. “If you got laid off with a severance package, that’s a good thing: it’ll take a minimum of $30,000 to start out.”
That and a solid business plan. Here are some tips about how to start your small business.
Begin With a Plan
Though economics, location and your product can determine whether your business makes a mint or whether you go belly-up, a large part of your success depends on how well you follow a plan.
Nobody can look into the future, but there are a few tips that you can use to make sure that your business stays firmly on the rails.
1. Do your homework. Before you run out and start that hardware store you’ve been dreaming about, make sure that hardware stores in your area are faring well in this economy. If they aren’t then now may not be the best time to dive in.
2. Make some calls. People love to talk about their businesses, especially if they’re successful. Search for people who are in the business that you want to be in and ask them these three questions:
- How did you get the capital to start your business?
- How does your business generate revenue?
- How much do you spend in rent, supplies and employees?
These and other questions will give you a better sense of what it will take to get started.
3. Create a formal business plan. Don’t just think about where you want your company to be in the next five or 10 years. Write it down. Here are some online tools to help you get started:
US Small Business Administration's Small Business Planner
Women for Hire's How To Start Your Own Business
AARP's From Idea to Business Plan