Recession Business

Recession Business success in New Zealand

Being faced with redundancies and company cut backs, many people are being forced to consider other employment options. A start-up business can be an attractive alternative for people with the means and know-how to make it happen.

• Business Development Consulting
• Business Development Consulting
• Home Business

The recession has left many would-be entrepreneurs clinging to their existing jobs, feeling uncertain about their ‘big idea' and leaving potentially life-altering future inventions un-invented.

Some economists suggest a recession is a state of mind rather than an economic issue, but is starting a recession business (a company launched during a time of economic downturn) really a wise move?

To take the plunge... or not?
If you are looking at starting a recession business you're probably aware that there are opportunities to be exploited. But the big question remains: should you go ahead, take the plunge and start up your business, or abandon your big idea (at least in the meantime) and stick to your day job?

Many well-known businesses began during a recession, such as Disney and Microsoft. With a bit of research, careful planning and sound financial advice and frugality, you might discover that now is the time to go after your dream. The secret is to remember that, during an economic downturn, consumers will think hard about what products to buy, so you'll need to think carefully before jumping in guns blazing.

What are the benefits?
Firstly, a recession forces business owners to be frugal, but starting a company without a lot of money is an excellent discipline for entrepreneurs. Having limited capital leads to creative thinking, healthy deliberation about expenditures, and the need for founders to pay very close attention to cash flow, budgets and balance sheets.

Secondly, a recession business forces an entrepreneur to take a closer look at their ideas, leaving them with ultimately more solid plans. Putting time, energy, and money into a business based on a flawed idea just won't work, no matter how enthusiastic you are. During an economic downturn, recession business owners are forced to look more critically at their business ideas, questioning whether there be a market for their product if customers are cutting back.

What are the first steps?
When you start a new business, you need to write a thorough business development plan, including the focus of the business, marketing, revenue and other details. Who, what, where, when and why are you starting a business? Who are you going to help? What are you going to achieve? When are you going to achieve it by?

To recession-proof your business idea as much as possible, choose a recession business with low start-up costs, and if possible, start a home business. Do your industry research, and check out your competition to determine what you can offer that will make customers choose you over the others.

Consider market trends. If more people are staying home because of the price of gas, perhaps you can launch a business that helps them make this adjustment, such as at-home entertainment, food, and services.

Steps to ensure success.
Market aggressively. During tougher financial times marketing and promotion are often the first things to be cut from small business budgets as people feel the pinch. This can be a mistake though - you need to make customers think they need your product, so be sure to give your marketing strategy careful consideration to ensure the best results.

Get your networking hat on and join your local Chamber of Commerce or local industry group. You will find both customers and peers that will benefit your recession business, and this will be the best strategy in finding the right business mentor. It's not mandatory that your mentor be a billionaire with more skills that Yoda, but you don't want to be taking advice from people who have no business giving it. Seek someone who is further ahead on the bridge you want to cross, who is also supportive of your desire to get over the bridge too.

Finally, make the customer absolutely central to your recession business idea. This might sound obvious, but it's something people rarely do well. Start with the philosophy of being customer-led but sales-driven. Many people start businesses because they fall in love with a new product or invention, but that doesn't necessarily mean customers will like it as well. Ask yourself, would they buy your product or need your service? How are they going to benefit from it?

Once you've got your business off the ground, be sure to treat your customers like royalty and always go the extra mile for them. Your customer relations will encourage people to come back and spread the word about your product.

If you can make the customer feel you care and give them a good experience in a recession, your recession business will have a great head start, and your inner entrepreneur will only become more business savvy and successful.

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Business images from Flickr: Recession Street, New Zealand Flag and Wellington Buildings.