Should I Start a Business in a Struggling Economy?

A common question from soon-to-be small business owners in the online business forums is, “Should I start a business in a struggling economy?”

Both the bull and the bear represent market conditions that create opportunities. A bull market is more forgiving than a bear market, but the odds for success are based more upon building a business on the basics than starting up in a booming market.

The following are 12 essentials for a successful business regardless of the economy.

1. Create a business that integrates with your life plans of personal and financial goals.

2. Be passionate about your business and the market that you are servicing.

3. Build a business that is an extension of your strengths and experience. Know your weaknesses. Have them covered by others, but manage the results.

4. Research your market (overall industry, competitors, and customers). Make sure that the market is large enough to meet your financial goals and is not shrinking significantly.

5. Have a business plan. Create a plan based upon a unique value proposition for you market at a fair market price.

6. Make sure that you are well funded.

7. Get involved within your industry. Build a network of mentors, business associates and joint venture partners.

8. Know your financial limits. Don’t operate beyond your means.

9. Take action. Stay involved. Don’t let your business coast on autopilot.

10. Provide a consistent experience.

11. Review your business and keep marketing on a regular basis.

12. Adapt to the changes in your market.

How many of the 12 essentials listed above discuss the health of the economy? They are all based solely upon the necessities for a business to survive regardless of the economy. This doesn’t mean that we are suggesting that you turn a blind eye to the effects of the economy on your target customer base. A number of these essential points will have you knowledgeable about the changes within your market and taking appropriate action to modify your business to meet the changes in demand.

Most businesses are mediocre at best – slave to market fluctuations. The reason for this is that the unskilled or overly egotistical will only have a grasp of less than half of these steps.

Why?

Because most business owners are not entrepreneurs, they are managers at best. Creating a business out of nothing takes a skill set that surpasses that of managing an operation based upon another’s idea. And just because you created your business from scratch doesn’t mean that you aren’t simply a manager. Does your business have a unique value proposition? If not, you probably started your business based upon the belief that someone else was making money doing something that you could do, too.

Sure there are many businesses that are basically copied from the same concept, but their chances for survival are only strong when the market is strong, too, unless they find a way of putting their own stamp on it. These copycat businesses comprise the majority of misguided dreams that result in hard luck stories that fall victim to a bad economy when in reality they were lucky to get off the ground at all.

So instead of focusing on whether you should start your business in a struggling economy, concentrate on the 12 essentials listed above. If you do, a bear market will bear better opportunities instead of becoming a bigger risk.

Maria & Doug
Small Biz Break
“give your biz a break”