The Recession Bites Further – Abandon All Hope?
Even in a recession there are people who start businesses and make a success whilst those around them mock and pour scorn on their ideas, at the same time there is many a budding entrepreneur who loses faith and confidence after hearing the negative views fired at their embryonic business idea. I have a number of successful businesses and started a new enterprise in January 2012 which is Ninja GPS Tracking. This is a true start-up and before getting into this industry I did my homework on everything from the product, the supply to demand and trends, all of this was done from the comfort of my lounge with a laptop and a steady stream of coffee.
Even in a vibrant economy starting a business is stressful and difficult and most people are not cut out for it, there are though a large number of people who have some good ideas or show real innovation but for a variety of reasons they do not take the next step. Risk is the factor that drives doubt and the term risk is applied to all areas of vulnerability from finance to the actual business idea itself, in most cases it is the risk that is amplified by others to the point that kills a start-up before it gets off the planning table.
Risk and Start-up Business
In an ideal world risk would be absent from starting a business but then of course everyone would start them, that said it is possible to do enough homework to cut risk to a nominal level even in a recession. Now I have read many an article on starting a business and it follows the same pattern – market research, business plan, finance etc, with market research the advice is very traditional and based around research activity once you have chosen a business type.
For me there is a pre-emptive phase and that is identifying a viable business opportunity, most people pick something that they have some association with, be it an interest or a link to a specific industry in some way, perhaps through education. I would advocate a different approach, an approach that would allow almost anyone, even people who are unemployed to research a potential business opportunity. In fact when done correctly most of the legwork can be done from your own living room at minimal cost, multiple ideas can be researched and the aim is to discover if there is a current market and one that is growing or receding.
The Clever Bit
And this is the clever part, by embarking on the correct course of action and using the right online research tools it is quite easy to look quickly at different business concepts to determine whether there is a market, the extent of that market online and whether it is an expanding market or a decreasing market. It can be done free of charge and will help a budding entrepreneur to make decisions about business types before embarking on the traditional 10 steps to setting up a new business.
I think what makes this a really good process is that it allows people who are unemployed to come up with different ideas about a business and then to test them to see if people are using, buying and wanting the products or services but at no cost. If when you start you look sensibly at the sort of business you could setup then the viability is increased immeasurably because you are de-risking the enterprise right at the point of choice. The right research will show upward and downward trends, important when looking at a business idea that will take a few months or more to get established.
Sensible Business Choices
Of course this is also important, if you are unemployed or of fairly average means starting up a restaurant or a car franchise is unrealistic but outside catering or an online fashion retail outlet is realistic and the research and groundwork will manage expectations based on the data revealed.
Ultimately your choice of start-up business should be guided by a business idea that stacks up with vibrant statistics these statistics should be married with the three principles of a good business –
The three factors are the cornerstone of early success and viability, for example getting a cheap product is great and if sales are good but if your supply runs out or is interrupted in month 3 then it will all come crashing down.
Creating demand is vital because without potential customers you will not sell your products and services, however is your method of marketing financially sustainable? If not then you may well end up with an abundance of stock you cannot shift which in turn will curtail your marketing activity.
This is an element that new entrepreneurs often overlook but fulfilment that is not efficient and reliable will harm business growth. People purchasing goods now expect fast delivery, much of your early growth will depend on happy customers who buy again and also spread the word about how good or bad you are.Selling through Amazon or EBay means product and service reviews will have a direct consequence on your reputation be they good or bad. Early reviews must be good and products or services must be delivered and provided on time.
This is just an overview of a starting point where very little money is used and put at risk in the early stages of creating your business. In the next sequence of guides that I will write I will discuss in detail the process of research, how and where to do it with examples of the results. It will help you to get a business idea that offers a real chance to make a success even in a recession and at a minimum of financial outlay.
De-risking your start-up business is vital in any economic climate but in a recession it may well be the difference between taking the leap of faith whether to start your business or not and even determine success or failure before you even get out of the starting blocks.
The next post will show how to start this process, the tools, the portals, understanding the data and using it to influence your choice of business to target with a start-up.