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Entrepreneurship in a Recession

Thom Ruhe, Director of Entrepreneurship, The Kauffman Foundation

The economy has slowed down, unemployment is up, and investment has grinded to a halt - so how does an entrepreneur, in the face of all odds, continue to thrive in such a market? The truth is, recessions are still suited for entrepreneurial growth [PDF], but your mindset, attitude, and actions might have to shift to meet the current market demands. Just because policy makers continue to bail out failed industries, despite Americans belief that government bailout dollars should go to small businesses , doesn't mean your start-up can’t take off now. Below are some ideas to help you weather the recession and come out on top.
Video: Succeeding in Times of Stress
Kedrosky Talk
The economy has slowed down, unemployment is up, and investment has grinded to a halt - so how does an entrepreneur, in the face of all odds, continue to thrive in such a market? The truth is, recessions are still suited for entrepreneurial growth [PDF], but your mindset, attitude, and actions might have to shift to meet the current market demands. Just because policy makers continue to bail out failed industries, despite Americans belief that government bailout dollars should go to small businesses , doesn't mean your start-up can’t take off now. Below are some ideas to help you weather the recession and come out on top.
 
 
 

Streamline and Go Green   Dont be Afraid to Ask   Find the Right People   Get Online Now   Go Open Source

Streamline and Go Green.

If you haven't started yet, now is the time. Small businesses everywhere are starting to jump on the "Green" bandwagon and for billions of good reasons - namely stimulus spending. Making competant choices about environmental impact can often cut energy consumption costs and, at the same time, serve as a cheap marketing vehicle. Whether switching out your gas-guzzling company vehicles with hybrids, which can save businesses money via tax breaks and fuel efficiency, or finding local, organic products for your restaurant, going green can be turned into a unique selling point. Making the investment in these improvements often means lower operating costs in the future, a characteristic for which many investors are looking.

 

Going Green Resources

  1. Even Small Biz Gets Into Green Act via MSNBC
  2. How to Run a Green Small Business, Parts [1][2][3][4][5][6] via eHow
  3. Carbon Offsets for Business via EcoBusinessLinks
  4. Green Marketing via MakeMarketingHistory

Don't Be Afraid to Ask.

Pride (or shyness) often gets in the way of successful entrepreneurship. Don't let it.
  • Ask for a Deal
    Every price is negotiable. It may not be in your best interest to haggle over the price of an individual pencil, but when it comes to making business purchases both large and small, don't be afraid to ask for a deal. Search for products that meet your needs but may not be the latest-and-greatest. If your office needs a new printer, go to the local store and see what printers they are offering for free with the purchase of a computer. Chances are, they are just trying to get rid of the old-model printer - and if you ask, you can get them for a steal. Try to shop at stores where the managers will have more discretion over pricing. This often means locally owned-and-operated venues, so you can feel good about keeping your dollars in the community as well. Finally, always price shop online first. If you can print out a real competitor's price, the local store will almost always honor it.

  • Ask for Investment
    You do believe in your business, right? You believe that your business will make money, right? If your business will make you money, it will make your friends, family, and community money as well. The next time you hesitate at finding ways to bring in additional investment, ask yourself this - if I don't believe my business is worth others investing in, why should I? As strange as it may sound, your business might be the safest investment for your friends and family, as real estate and the stock market continue to take hits. Just be careful when negotiating valuation and equity stakes.

  • Ask for Help
    Entrepreneurship can be lonely at times. Instead of learning to reinvent the wheel, surround yourself with people who are competant and don't be afraid to ask for advice, product reviews, or testimonials. Think about the things that make you uniquely qualified as an entrepreneur and make sure you know those better than anyone else. For the rest, get some help. Be creative and even consider business bartering. This may be the perfect opportunity for you to make the relationships that will be valuable when the economy turns around.

Resources on Asking

  1. How to Ask Family & Friends for Investment via About.com
  2. Family Sponsored Ventures via Kauffman Foundation
  3. Free and Confidential Business Advice via Score

Find the right people, keep them happy.

Find people who are also inspired by your vision. Let's be honest, starting up a business is not easy and your first few employees are going to experience the same ups-and-downs that you do. However, if your business idea truly has potential, you will be able to find likeminded individuals who are excited about being a part of your team. Those first few hires will be key to your long-term success, so find people who are ready for battle, and not just looking for a 9-to-5.

More importantly, once they are on board find ways to keep them happy, even without money. Be as honest as possible both when you hire the individual and as you make salary decisions about the state of the company, not just their performance. Show them how you cut back personally so that they can thrive in the workplace. Make life easier for them by making the workplace more comfortable or fun. 

 

Get Online, Fast

It really doesn't matter what your business does, you need a website. It is the easiest way for potential customers to find your business hours, location, and to refer friends. Make sure that it is professional and well-kept. Don't add information to the site that needs to be updated unless you have the time and resources to keep it updated (for example, if you run a restaurant with seasonal menus, don't publish them unless you can keep them updated).

 

Online Resources

  1. Low Cost Marketing via Entrepreneurship.org
  2. The Easy Way to Launch Your Web Business via SCORE
  3. Get a Blog via Wordpress
  4. Create a Business Website with Google via Google

Go Open Source

I know this is a bit of a religion for many. But, there are many ways to save yourself and your business money and going Free Open Source Software (FOSS) is one to consider. Many people don't realize that there are completely free alternatives to the expensive software you use to run your business. Whether it is simple desktop publishing, graphic design, or managing finances, chances are there is a free, viable alternative to meet your young business's needs. Moreover, your company's proclivity towards open source may help you attract ideologically minded employees who care more about doing things right.

 

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