Start me up!
February 9th, 2009 | by Amy EdwardsWith all the talk of gloom and doom, recessions in the economy, you might be forgiven for thinking that this is not the best time to start a new business.
Banks are hoarding their cash and consumers are being more frugal than ever. This considered, it may be surprising to know that during a downturn is often the time when many DO actually decide to start their own business. Here are the main reasons why it can be beneficial to start a business during a recession…
- Redundancy money – workers who have been paid off by their ex-employers either set up a company offering exactly the same service as they were employed in, or, start something usually quite similar.
- Commercial Property is cheaper because companies are downsizing.
- Competition is much less, as companies scale back and reduce advertising and marketing budgets.
- People find a product or service that comes to fruition in the slow down.
- Labour is cheaper and in greater supply.
The one problem is getting start-up capital – if you need the bank to ‘cough up’ initially you could be given short shrift. BUT, if you can get the money, you could benefit from the above points and find that starting a business in the current climate could reap dividends in the future.
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2 Responses to “Start me up!”
By Phil Gardener on Feb 9, 2009 | Reply
Also useful to tap into a new network of people who can offer advice, products and services geared towards new breed of new starters – biggest problem is traditional business support services, inc serviced office providers, that will not change their offers to suit the new start-ups i.e. will not offer short term leases/licence agreements, insist you but ‘it’ (whatever they sell) by the ton. Unlike dot-com start-ups the new start-ups are run by people with extensive experience and contacts and are being assessed by bank dweebs with zero experience. My advice it to eschew the usual marketing and business networking advice and look at new sources of advice such as Twitter.
By The Works Business Centres on Feb 10, 2009 | Reply
Phil,
Agree with some of your comments, and there is some great advice or experience to tap in to on-line these days. However, I have to disagree with saying serviced offices will not change their offices to suit the new start-ups.
We’ll sit down with any new business interested in our offices and try to work out a payment schedule to suit them, whether that means a free period initially, a staggered deposit, or shorter minimum term. We’re a small business ourselves so can appreciate the issues others may be having.