Starting a business is a hard enough decision, but more so during this period of tough economic climate. Economic recovery has remained slow, financing remains tight and consumer spending remains tentative.
But if you are looking to jumpstart your business today, here are some things that you need to consider:
1. Realize that it’s a new world out there.
With the financial crisis and economic downturn, lending became very tight. Many small business owners – even those that are profitable and with good credit ratings – had trouble getting credit, a situation that continues to this day. The situation is even more difficult (almost nearly impossible) for home-based entrepreneurs, especially those that are just starting out. Even with collateral, banks prefer to lend to businesses that have demonstrated several years of profitability.
If you decide to start a business now, you will be better off if you have alternative sources of financing that does not involve applying for a loan from traditional sources. You can’t simply march into a bank with your business plan, and expect to get a loan to jumpstart your business. You’ll just end up disappointed. A better approach is to try to save enough money so you can have the capital you need. Or use non-traditional lending options such as supplier credit or credit cards, though be prepared for higher cost of borrowing.
2. Think outside the box.
During the economic downturn, many businesses went under and closed shops. You don’t want your new business to become a casualty of the bad economy so soon after just starting it.
Given the tough climate, you need to let your creative juices flow and think outside the box. Look at the norm and how other business owners do things, then find ways for improvement. You may find new opportunities emerging in your industry that your business can take advantage. There may be new ways of doing things that can help improve the efficiency of your operations. Be willing to look at new perspectives and be open to doing things differently. Strive to create value for your customers in ways that were never done before. Find alternative means of earning from your business.
3. Manage your earnings well.
While the economic recession ended in 2009, the business environment remains tough, more so for the home-based entrepreneur. Many economist remains cautiously optimistic about the overall economic recovery, which basically means that the economy is still on a shaky ground and a misstep could bring us back to recession.
What does this mean for you? When revenues start to come in, don’t blow your earnings. Instead of buying that new car that you’ve been eyeing, put your earnings back into the business. Make sure that you have enough cash flow to tide your business over when times become even tougher still. The more money you have in your business, the higher the chances of seeing your business succeed.
4. Be prepared to take the full plunge.
Starting a business when the economic situation is bad is scary. Your customers may still be holding on tight to their purses and not spending as much as they used to, which makes it tougher for you. But if you decide to start a business now be ready to jump in, commit 100% to your new endeavor, and put all your heart and soul to seeing it succeed.