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Start a Business in a Recession With No Money? Here Are Seven Tips
You are young, have no money, you are inexperienced, have no contacts, no access to credit and, by the way, you are planning on starting a business in the middle of the worst recession since the Great Depression of the 1930s. Congratulations! You may have picked the perfect time. Why? Because this recession has damaged so many small businesses that during the recovery stage, they will have to reinvent themselves, which puts you on an even footing with many older businesses. We recently interviewed a successful entrepreneur who started his business at the beginning of the 1972-1974 Recession. For those too young to remember that recession, it was the longest and deepest downturn of any since the Great Depression (to that time). Some of this entrepreneur's observations about his experiences are as relevant today as they were then. And remember this about him, he not only survived that recession and launched his business but he went on to become a multi-millionaire...not a bad resource to take advice from! This entrepreneur had graduated from college in the 1960s and completed a masters and a PhD by the early 1970s and got a job in his area of expertise. Only one problem, he found it boring and there was no way he could make a lot of money. He felt it was time to go into business for himself. He decided, in fact, to start a construction-related business but his comments apply to any business. He looked as his assets and liabilities and made his plans based on the facts on the ground, as he put it. His assets: he was young (with a lot of energy), educated, and had a supportive family. His liabilities: it was the beginning of a recession, he had no money, he had no banking contacts, he had no business contacts, he had no experience in the area of work he wanted to go into, he has no business experience and he had no prospect for work. Wow! Here are the seven steps he took: 1. He cut all of his costs to the bone. He moved back home to his parents house. He said that unless you are launching a business and are fairly certain on income in a short period of time, reduce all costs. He has seen more businesses with great ideas go down the drain because the entrepreneurs simply could not sustain the business long enough to make that transition from loss to profit; from an un-established business to an established business. He operated his business out of his parents basement and drove a Volkswagen beetle. 2. He found a part-time job unrelated to his business to bring in some money. It was not mentally demanding and left him fresh and ready to pursue his dream every day. 3. He also took any work he could find vaguely related to his business. When he came on the job site, he was eager, enthusiastic and did a great job, whatever the job was. He made an impression. He wanted to impress the contractor/owners on these jobs in the hopes of getting work in the future. 4. When he heard about projects in his marketing area involving churches, schools, synagogues and other community groups, he volunteered to help out either on a committee or actually helping with the work. Once again, he made an impression on the board members of these various organizations who liked his enthusiasm and his work ethic and in fact hired him for million-dollar jobs later on. 5. This entrepreneur had no money to establish an entire branding program (nor did he know much about branding at the time) for his new company. But what he did was to invest money from his part time job into a great logo and buy very high quality business cards. He gave out those cards to anybody and everybody who would take one. He jokes that he invented the elevator conversation where you detail for all those present what you do and how you do it between floors one and two. Initially, he said, he was a shy person but he developed a real gift of gab and told everyone he met about his business and its products and services. 6. This entrepreneur took another important step. He joined business groups within his industry and he joined general business groups within his marketing area. He said this exposed him to people who became his mentors within his industry and it exposed him directly and constantly to the movers and shakers within his market. 7. With the prolonged recession making for a slow business climate, he literally learned everything there was to know about his new business. That is, he learned everything there was about the construction business he started; and he learned about successfully operating a small business--two completely different disciplines. When that prolong recession began to lift, this young entrepreneur was ready. He was not carrying excessive debt like many of his competitors were to try to stay in business, he was knowledgeable about construction and small business issues, he was well known in the business community and he had banking, vendor and customer contacts.
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More articles on starting a business
Top 10 Tips for Start Up Businesses
Writing a Business Plan: Business Plan Mistakes To Avoid
Do You Have What it Takes to Start a Business?
What Are the Steps to Starting Your Own Business?
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