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    1 Reply Latest reply on Sep 4, 2009 3:45 PM by mrbj2k

    Why Tough Times are Good to Start a Business

    LUCKIEST Guide
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      Why Tough Times Are Good Times to Start a
      Business
      \!http://www.bottomlinesecrets.com/images/drop_caps/blue_t.gif!
      he weak economy is making jobs harder to find. One option for frustrated job
      seekers is to stop looking for employment and start working for themselves.

      A recession is an excellent time to launch a small business. Larger companies
      rein in their advertising and expansion plans when the economy slows, making it
      easier for new companies to get noticed and capture market share.

       

      Newer, small companies also tend to have lower fixed expenses than older,
      larger ones -- and that allows them to underbid their competition. That’s very
      important during a recession, when customers are particularly price-sensitive.

       

      The trouble is that starting a new business is risky. Sinking all of your
      savings into a start-up or taking out a small business loan could leave you in a
      deep financial hole if the business fails.

       

      There’s no way to eliminate all the risk from entrepreneurship, but you can
      greatly reduce your downside if you keep your business’s expenses to a minimum.
      Here’s how to launch a business for less than $5,000...

       

      THINK SERVICE

       

      The service sector offers the best opportunities for low-cost business
      start-ups. Unlike retail or manufacturing businesses, service-sector
      companies...

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Rarely require major up-front outlays of cash* for
      inventory or materials.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Often can be run out of the home,* eliminating the need
      to rent an office, factory or storefront.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Tend to be local,* so there’s no need for expensive
      nationwide marketing campaigns.

       

      Four ways to come up with a low-cost service business idea...

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Keep lists of the things that frustrate you* and the
      things that you wish you didn’t have to do for yourself. Consider both your
      personal life and your previous professional career. Perhaps other people would
      pay you to help them avoid these annoyances.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Find out which service-oriented businesses* (and other
      low-cost businesses) are thriving in big cities. Trends tend to begin in big
      coastal cities, such as New York and Los Angeles, and only later work their way
      to the rest of the country. Read the business and lifestyle sections of
      magazines and newspapers from major coastal cities to find out what new business
      ideas are thriving there. Consider whether similar businesses would be
      successful in your region.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Target a growing demographic.* Open a business that
      serves a rapidly expanding demographic, and the odds of success are in your
      favor. Currently the fastest-growing demographics are seniors and children.
      (Make sure these national trends apply to your local region before launching
      your business.)

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Search for service opportunities related to your professional
      experience.* If your new business is in a field that you already know
      well, your learning curve will be shorter and your Rolodex will already be full
      of potential customers and other useful contacts. Make sure that your new
      business does not violate any noncompete agreements that you might have signed
      with former employers.

       

      AVOID UNNECESSARY COSTS

       

      Start-up expenses that your business can live without...

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Renting an office.* Work from your home if at all
      possible. Meet with potential clients and other business contacts in their
      offices... at the local coffeehouse... or in the lobby of a hotel.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Buying office furniture and business equipment.* Try to
      make do with the furniture, phones and computers you already own. If you must
      purchase business furniture or equipment, search for used items. One advantage
      of starting a business in a recession is that other companies are going out of
      business and selling off their business furniture and equipment at low prices.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Expensive marketing efforts,* such as direct mail and
      television ads. Their high cost makes them too risky for your start-up.

       

      FOUR EXPENSES WORTH PAYING

       

      Not all start-up expenses should be avoided. Do try to do the following...

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Incorporate your business.* A lawyer might charge about
      $2,000 to help you set up a Limited Liability Company (LLC) or corporation, but
      it’s money well spent. If your business is not an LLC or a corporation, your
      personal assets could be at risk in a lawsuit.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Launch a Web site.* A Web site does not need to be
      elaborate, but it must look professional. This is particularly important if your
      company doesn’t have an office or a long track record. To learn more about how
      to start a Web site for your business, go to www.allbusiness.com and type “Web site” into the search
      window.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Arrange for health insurance.* Obtaining health
      insurance at a reasonable price can be a major problem for those who are
      self-employed. Find out if you are eligible for COBRA benefits from your last
      job or if you can get coverage through your spouse’s health insurance plan. If
      you are past your 50th birthday, you should be eligible for health insurance
      through AARP (888-OUR-AARP, www.aarp.org). Or find out if a health insurance plan is
      offered by a trade association that your business makes you eligible to join.

       

      !http://bottomlinesecrets.com/images/bullets/blue_bullet1.gif!*Buy Business Plan Pro.* If you don’t have experience
      writing business plans, this software is the cheapest, easiest way to do so.
      (Palo Alto Software, $99.95, 800-229-7526, www.bplans.com.)

       

      Business plans are like road maps. They help you lay out your route to get
      from where you are to where you want to be. Good business-plan software prompts
      you to think about factors such as competition, pricing, staffing and marketing.

       

      Good luck

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