Guest Column: Economy got you down? Start a business

Oftentimes, the monotony of punching the clock as someone else's employee leads to daydreams of starting a business and being your own boss. In rough economic times, those daydreams may never pass beyond imagination.

But a down economy can actually create great opportunity for budding entrepreneurs.

For starters, office rents could be lower and suppliers may cut better deals. Downturns are a great time to sign new accounts. Customers are examining every expense for ways to save, including asking eager entrepreneurs for price bids in order to replace expensive vendors.

An unfortunate reality of hard times is increased unemployment. For small-business owners, this means more experienced talent is available in the marketplace, with more affordable salary requirements.

However, as you can imagine, the grass isn't all green for entrepreneurs making a start in a down economy. A down economy means tighter lending standards, higher prices on energy and food, and weak consumer spending. Today's dreamers need to ask themselves if they have the appetite for risk and fire in the belly to succeed as a small-business owner.

For those inspired to give entrepreneurship a go, here are some quick tips for starting a small business in poor economic conditions:

Avoid middle-market products and services. Even in a down economy, consumers and businesses need necessity-based products and services - office supplies, tech services, food, medical assistance, waste management, etc. Conversely, an innovative luxury item can also be successful. Avoid the middle ground; if customers can delay purchase while times are hard or choose a less expensive alternative, that's not the industry to be in.

Don't fret the big bucks. If startup capital is an issue, consider starting a part-time business. Keeping a day job for a while can help maintain a steady income while waiting for sales from the new business venture to kick in. It's also a smart way to work out kinks, gain industry knowledge and build a solid customer base without superfluous financial stress and pressure.

Strategize staff selection. Minimize full-time staff. Hire part-time employees. Contact the local college or university to see if they offer a formal internship program. Outsource or hire freelancers who can take overflow work. Don't invest precious resources employing people who may be underutilized. As business grows, you can consider adding full-time staff.

Embrace the guerrilla. Don't spend a fortune on advertising. There are hundreds of free or inexpensive ways to do business promotion: Distribute free product to attract people and secure repeat customers. Write a newspaper column. Get involved with the chamber of commerce. Network with other area business professionals.

Buy a business. Many businesses for sale are completely viable; the current owner has simply run out of time, energy or entrepreneurial passion. Although it may cost more up front, the purchase of a business can provide an existing foundation and income stream, ready to be nurtured and advanced to a higher business level.

Anytime can be the right time to launch a venture, if the opportunity is right. During periods of a challenging market, big companies suddenly don't take any risks; they retrench and hunker down. In contrast, small and agile entrepreneurial startups are out reinventing models. Great ideas, some savvy business sense and a passion for self-employment can overcome any type of economy.



Joseph R. Cardamone is president of the U.S. Federation of Small Businesses, which was founded in 1983 and advocates for the rights and interests of small businesses and the self-employed. Cardamone can be reached through josephc@usfsb.com.