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Staying ultra positive about business prospects in the midst of a recession may cause you to think my rose-colored glasses are blocking out the real world. The truth: opportunities abound when the economy is down. It’s been my experience that it takes about a year for most start-ups to establish a harmonious rhythm as a working business. In a year, an economic upturn should be visible on the horizon and your new company could be established and poised to take advantage of an economic growth cycle for several years into the future.
Consider these eight reasons you want to form a new business now:
- Money is available.
It’s true that bank loans for new businesses are likely to be too risk-intense for most lenders, except possible SBA loans beginning this summer. However, friends and family who still feel skittish about the stock market could welcome an opportunity to invest in your excellent business idea. (See my column, Creative Approaches to Raising Capital.) Develop a smart business plan. Pitch it to potential investors. You may be surprised by the response you receive.
- Capital equipment is cheap.
If your business will require investment in capital equipment, there are deals to be had, which would rarely be available during a booming economy. Because so many businesses have failed, there is an almost unbelievable array of used equipment for sale at rock-bottom prices. This is the ideal time for many industries to buy pre-owned capital equipment.
- Real estate costs are low.
Whether you’re looking to lease office space or you need to buy a facility for your company (See my column, Should You Buy Commercial Real Estate?), in most markets prices are lower than they’ve been in many years. Locking in long-term business space at today’s prices can prove to be a huge money saver in the years ahead.
- Your customers want new approaches.
Do you have a new take on an old idea? Is it a product or service that will immediately appeal to specific target markets? Will it make their lives easier for less money? Most businesses and consumers are looking for ways to cut costs and improve functionality. If you’ve built a better and more cost-effective mousetrap, bring it on. Your market will be happy to see you.
- Credit is available from suppliers.
In response to decreased funding from banks and third-party financing agencies, companies supplying goods to businesses have had to re-think their credit policies. More credit is available now than a year ago — although it still requires building a solid business credit foundation. (See my column, Small Business Growth and Your Credit.) As a start-up that builds a credit base and develops it, you should be able to qualify for more credit, faster than you could previously.
- Tax law changes benefit small businesses.
Recent changes in tax laws offer various tax advantages to small businesses that need to invest in equipment and to companies that can hire specific groups of individuals. (See my column, How the Stimulus Bill Can Help Your Business.) Talk to a CPA who specializes in start-ups and small businesses about how you can take advantage of new tax laws. A little planning can deliver major benefits to a small company’s bottom line.
- Extraordinary employees are looking for work.
This is definitely the time to hire. There are so many talented people searching for jobs. And since there’s a shortage of start-ups to join, professionals who prefer a start-up environment will flock to your exciting new venture.
- Marketing opportunities are plentiful.
Having launched several products during previous down markets, my experience tells me it’s an ideal time to get attention. Media of all types are looking for positive stories. Don’t neglect this part of your business plan. Marketing is more important than it’s ever been. There’s a funny thing about that better mousetrap: You have to make it easy for your customers to get their hands on it or they’ll buy from someone else.
If you were thinking this is the worst possible time to start a business, I hope you’ll reconsider. This could be the perfect time to launch your unique concept.