Launching a business in tough economic times...

What are people's thoughts on starting a business in the current economic climate?

There seem to be those who say that it's the worst time to start and those that say it could actually be a very good time

Interested to hear what your thoughts on this are and why starting a business now could be a particularly good or particularly bad idea!

Stephen

Re : Launching a business in tough economic times

I think that if you have a good idea then it is always right to launch a business if you have the passion and knowledge and perseverance to see it through.

That said if you need a lot of capital to finance your business then it will probably be trickier than usual as credit is very hard to come by in any form at the moment!

Re : Launching a business in tough economic times

Thanks Jim and to those that have sent me messages!

Interesting to get the range of thoughts from the optimists, the pessimists, the realists and all the other -ists!

Re : Launching a business in tough economic times

Lots of articles in the papers over the weekend on this topic.

It seems that most 'experts' are of the opinion that if you can start a business and make a success of it in tough times then you will fly in hard times.

Then again it may be harder to get started as clients to help you get off the ground might be harder to come by right now...

Re : Launching a business in tough economic times

I was made redundant last week by my employer of two years so I decided that now was as good an opportunity as any to try going it alone. As my line of work is in computer repair and IT support it requires little monetary investment on my part, just my time to go round putting fliers through doors and chatting up local businesses for work. As I don't have a regular wage coming in that's not a stumbling block for me anymore. Hopefully I can position myself as a cheaper alternative to expensive established repair businesses in the current financial climate.
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Re : Launching a business in tough economic times

Starting a business is tricky at the best of times, it will take a brave person to start one now (or perhaps sadly desperate), however that said there is no intrinsic reason why you can't start a business in the current climate!

Re : Launching a business in tough economic times - Mind your market research then

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Re : Launching a business in tough economic times

Well if you marketing is based on saving money it might be good, also higher quality employees are easier to find. I really believe it depends on what the business is, alchohol, and mcdonalds tend to do very well in poor times.

Designer clothing do not.

I have reacently started a web based business, I will start advertising very soon, advertising is extremly inexpensive on the internet these days.

I disagree you need to be very desperate to start in these times, I am not desperate at all and will hold out till times are good again if nessesary, but I believe if I can get this going now, those times will be easy for me.
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Re : Launching a business in tough economic times

I don't think you have to be desperate either - I imagine it may take longer to get the business off the ground however as it may be harder to get those first clients to spend in harder times.

Re : Launching a business in tough economic times

Well said Sasha

Re : Launching a business in tough economic times

The constructive bit about a financial crisis like the one we are going through is that it is creating vacuums in the market. Woolworths is an outstanding example of this. In my home town just try and buy say, a sewing kit today. Vacuums are a gateway to opportunities. The trick is to find the one that will work for you.

Joe
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Re : Launching a business in tough economic times

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Re : Launching a business in tough economic times

I agree completely with Joe - and those that can both find the vacuums and exploit them without getting sucked into debt (pun intended) will win through handsomely!

Re : Launching a business in tough economic times

Remember those businesses that survive a recession are those that are efficient and not overladen with overheads and fixed costs.

The recession is opportunity for those businesses that are efficient to take over business from inefficient ones.
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Re : Launching a business in tough economic times

Might be a good ideas to think if outsourcing could be a way of recuding overhead

Re : Launching a business in tough economic times

It's never a good or bad time. Ever since I can rememeber, people always talk about how good it was in the "old days." Truth is, it was always hard. People talk about recession today - to me, it feels like I've always been in a recession. There never wasn't a recession - only the banks lent easily and "the good times" were just based on debt.

You always benefit by getting used to the process - developing products, marketing them and learning to generate income etc. You shuold have started yesterday.

Good Luck.
I'm currently very impressed with www.clickok.org

Re : Launching a business in tough economic times

Recession is an opportunity for some and a threat to others. Many good businesses start during a recession - it provides the catalyst (often redundancy & redundancy pay)There has probably been no better time in history to start a business if you can find a way of leveraging the internet. Outsource those tasks that you cannot do yourself to freelancers on the internet.
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Re : Launching a business in tough economic times

There was an article in yesterday's business telegraph where the owner of the key-cutting chain Timpsons said that actually a tough economic climate can be one of the best times to start a business if you know what you are doing.

This was because there are lots of bargains to be had: for instance great deals on commercial property rent rates, negotiating good terms with suppliers such as extended credit and so on.

Re : Launching a business in tough economic times

Mark touches on an interesting point here around outsourcing.

I have noticed a definite increase in the number of companies that are outsourcing tasks overseas at a rate that people working in the UK cannot compete with.

This is good news for those companies but generally bad news for the UK labour market; I have spoken to quite a few kids of friends who have just come out of uni with an IT degree and are finding it very hard to get web related work and projects as so much of this sort of stuff is being outsourced to India where some people are apparently happy to work for a matter of dollars per day!

Re : Launching a business in tough economic times

That is bad, especially with all the unemployment in the UK and the current job losses.

Re : Launching a business in tough economic times

Indeed it is bad.

It probably won't be addressed until labour prices and expectations there raise to such a level as that benefit is lost.

Meanwhile the rest of the world will continue to subsidise their growing economy at the peril of their own countries.

Re : Launching a business in tough economic times

Hi. I started my business SJ Grinding 5 years ago after being made redundant sfter 34 years with Salt Surgical.
We found that there was a need for a specialist company who can do work on site for clients throughout the country and now have 100 ex salt surgical engineers working with us through 4 branches which are all franchised.
We dont hsve the costs of direct labour as the franchisees deal with all that.
In the last 6 months we have taken on the work for 12 major hotel chains over 300 catering companies both owner managed and multi unit and also got a further 4 hospital catering companies. Thesr companies contacted us direct becayse it us cheaper and more cost effective to get their knives reground than buy new sets of knives.

In this recession people will look for a cost effective solution so my advice is this.
Research your potential client base ie caterers florists dressmakers etc.
Keep your prices reasonable to generate repeat business
Give an effective service which is customer focused
Also make sure that you listen to the clients needs and give them what they want and they will recommend you to others in their industry.

To save paper invoices to clients who have email addresses we now offer electronic invoicing through www.tradeshift.com which can be used on an iphone or similar and is free as well.
So this also may be a good idea for your business as well perhaps?

Suzanne Jordan
Operations Director
SJ Grinding Birmingham.

Re : Launching a business in tough economic times

The same criteria apply in tough times as well as good: Are you selling something that people really want, which there is a substantial deamnd for, at a price they can afford, which will turn a net profit sufficient to pay you a reasonable living?

That's all that matters. The rest is waffle, diversion and make-work.
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Re : Launching a business in tough economic times

The advantage of having a business are obvious but very few are brave enough to take the first step that you may feel disappointed of the lack of adrenaline rush.

You just have to decide what type of business and products you will sell. It is best to choose a field with which you are familiar. Otherwise it will be hard to understand your customers’ needs.

Outsourcing is a good idea too, you can save on money, time and infrastructure.

Re : Launching a business in tough economic times

I think it is very hard times to start a business. What worries me most is if it get even worse than what is now. You need to feel the rush to do it and have a couple of back up plans.

Otmane El Rhazi.