Sunday, February 15, 2009

For some, starting a small business is Plan B

The recession is creating many "accidental entrepreneurs" — people who suddenly find themselves out of work with no viable option except to make it on their own through self-employment or starting a small business.

A question I am frequently asked these days is, "What kind of business can I possibly start?"

The best business opportunities come from things people already know something about. They come from our work experiences, our hobbies, or our everyday lives. Find something from your experiences that is also a need for others.

If you are lucky, it may be a niche that nobody has discovered. Or, if there is competition, the existing business may not be meeting the needs of customers in that market. Either way, solving everyday problems that you understand is the best path for your first business venture.

In today's economy you can create a strong competitive advantage if you can find a way to build better value for customers, perhaps by offering them the same or even better quality than competitors at a lower price.

Seize the passion

Make sure the business is something you are passionate about. Is the business something that will truly make you excited to get up in the morning?

There are many tough periods during the growth of a business when entrepreneurs need true passion to carry them through. Many entrepreneurs will tell you that the only type of business you should ever start is one that is funfor you to operate.

Doing something you enjoy — and believe in — will help carry you through the long hours and the stressful days to come.

Money also matters. The business will need to generate enough income for your personal budget. Also, it will need to become profitable before you run out of whatever funds you have saved to live on during the start-up period. If your savings are meager, you may need to find a venture that generates cash flow quickly.

An entrepreneurial business is not just a simple financial investment or a way to make quick income. It becomes more personal and emotional than that.

Surveys of entrepreneurs tell us that income and wealth are only part of the reason for launching businesses. Often entrepreneurs want to build a business that has a culture that reflects their personal values.

Finally, don't overlook the importance of building a business that allows room for the other things that are important in your life. The time and energy you want for your family, your friends, your church, your hobbies. All that must be factored into your planning.

Although you may have never planned to start a business, many of the "accidental entrepreneurs" from the last major recession in the early 1980s found it a rewarding career path and have continued to be entrepreneurs ever since. Keep the faith.

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