The Economy Sucks. Finally!!! It’s Time to Start a Business!
The sky is falling. Oh – My – God. It’s all over. Stick a fork in us, we are done. NOT!
So, the economy sucks! So what? Here’s some news for you, bucko. It sucks every ten or fifteen years. Welcome to the great cycle of the economy. We go through this all the time, and here is a predication, it will continue to stink for quite while. Perhaps another year or so, then it will begin to heal and thrive again. It always has and always will, cycle.
But what if this one is truly the end; the great collapse? What if this is the death of the proverbial Roman Empire? It could be. It is very, very unlikely, but it could be. And if it is, don’t worry about it since there will be little you can do.
So here we sit, as entrepreneurs, on an economy that sucks. It will either revive over the next year or two or even perhaps die. But one thing for sure, it will get worse before it gets better. Big business will tighten their budgets, followed by the medium size guys and finally the small businesses will have the wind knocked out of them as everyone slows down.
And it is now, right in this moment, that is it the best time to start a business. Yes, it’s true. So true that it is worth repeating. Now is the best time to start a business. Here’s why:
1. Less Competing Startups – Most people don’t want to start something when things are bad, so they don’t. This is the old “buy low, sell high” rule. If most people are going one way, your advantage is in going the other way. Start when they aren’t.
2. Get Rich Quick Guys Run Away – The folks that were in business to get rich quick go running for the hills when times get tough. And with them exiting, there is even less competition for you to worry about.
3. Plant The Seed – If you get started now, your business will likely grow slowly. I mean, a slow economy means slow business for you. But that is true of a startup in a strong economy too. So grow lean and mean during these quiet times, and be positioned to grow explosively as the economy recovers.
4. A-Players Become Free Agents – When the big companies start laying people off, and they already have, some great talent will be freed up. Instead of using a high cost recruiting service, a smartly placed (free) Craig’s List ad may land you a top shelf A-player.
5. Go International – A weak US economy is typically coupled with a weak US dollar. That means our other countries can buy from you, here in the US, on the cheap. Make it easy to do business with you, and global economy is at your beckoning.
6. Time for Luxury – What? Am I crazy? Nope, I’m not. Luxury items actually sell stronger in a weak economy. Certain luxuries that is. They are called micro-luxuries. These are items and services under $100 that emotionally replace the loss of big, expensive luxuries. When people give up the new car they wanted or the renovation to their house, they instead start buying more of those inexpensive emotional replacements like a dinner out, or a day at the spa, or that triple latte grande.
The economy sucks and it is time to celebrate. Don’t do what the others are doing. Don’t sit there, curled up in a ball sucking your thumb. If you have ever wanted to start a business, there is no better time then now. Be cautious and be smart, just like you would at any other time starting a business. But don’t be dumb and wait. There has never been a better time to start a business… expect for the last economic downturn ten or fifteen years ago.
Update! 10/17/08 – I went on ABC to discuss this strategy http://abcnews.go.com/Video/playerIndex?id=6060033
October 7th, 2008
OUTSTANDING article! WOW, this is something that I can’t wait to pass on.
Here are a few facts to back up this article. I am in the “Candle Industry” and have had ALOT of people turn their noses to me in the past saying, why would I want to be apart of a “CHICK” business…
Well, guess what my friend those same people are contacting me once again. WHY?
BECAUSE CANDLES ARE A COMFORT and provide a soothing feeling to anyone especially during times like these.My business has BOOMED over the past few month!
So THIS is the perfect time to start a Business!
Cheryl Hill
Team Leader and Business owner
Contact me if you are ready to make some money!
October 7th, 2008
I especially like 1 and 2.
Great stuff Mike and so true. The venture also comes out stronger when the eventual rebound comes and you have a leg up on any new competition.
Launching a business or a new project in an existing business during lean times also forces you to be more careful about costs and margins, setting you up to be a better cash steward in the times of plenty.
October 7th, 2008
Hey Mike, love this post.
There is an amazing person I used to work for (incidentally, I didn’t see the amazingness right away, and didn’t get along with him very well early on) who gave me this piece of advice:
Persistence wins.
Persistence got me that to begin with, and ultimately allowed me to build a good lasting relationship with this person; it’s three years since I’ve worked for him and we’re still in touch. Does it make sense if I explain it by saying that I needed to learn to speed up and work harder, yet slow down at the same time?
The benefits of persistence can take time to realize. But in the end they are totally worth it.
October 7th, 2008
Good article Mike. Keep ‘em coming. p.s Love love love 1, 5 & 6. The cute panhandler pic is a bonus *wink*
October 7th, 2008
This is by far one of the best articles you have written for this blog Mike.
In an economy like this…people need to read this. It not only gives them hope, but for that matter sound business advice!
My favorite #1
October 7th, 2008
I totally believe in this strategy. To the point where my most recent company was started this year when the economy was already clearly indicating problems coming our way.
We are focusing all our efforts on being the leader in our niche and intend to come out blazing as the economy recovers.
- Mike
October 7th, 2008
I agree and disagree with mike. Every market is good for someone, the real question is… “are you that person?”. Saying the market is bad just reinforces the media who is appealing to the masses and the masses are POOR! Ok that may be harsh but I am in real estate in Denver and we are seeing the best buyers market in 5+ years. Everyone is wearing cement boots since the media says its “Bad” to do anything outside of putting your money under your mattress. So yes, take advantage of the market, start your business, buy low now and sell high later.
October 7th, 2008
SIDEBAR: Just moments ago I was writing to someone that found me thru the TPE Network (one of quite a few people) about the energy and continuous inspiration and fulfillment that I have received from Mike “TPE” Michalowicz’s blog, presence, resources and network in general. TPE Fever is contagious and something I don’t mind catching.
Like I always say, problems = opportunities and during hard times like this READ: 2+ years entrepreneurs esp. in the service industry and niche markets will continue to thrive (myself included). Nobody knows this space better than TPE’s and it’s Founding Forefather, Mike Michalowicz. So jump on board, there is enough room for everyone!
October 7th, 2008
Me again…forgot to comment on the article
Yes, NOW is the best time to start a business. When I was in sales and the economy got tough #1 and #2 was especially true. During the hardest times of the economy as both an established salesperson and now an entrepreneur has brought me huge business boosts…and the reason being is bc the ones who can stomach it TRANSLATION know what the hell they are doing and continue to grow are REAL people who do what they love and do what is good for them. They are fulfilling their purpose and for all the tough times and people who competed in their space and undercut them…well know the universe is repaying that debt (to both the one that giveth and the one that tooketh away).
We pioneers see more opportunity and potential when the trend followers are gone, not to mention we have a truly strong and established network who has been with us from the beginning for all the right reasons and they are not going to abandon us but instead pool what they’ve got so that we will become that much greater independently and colletively.
No doubt, if ever you have been on the verge of starting a business, it’s now or never, all or nothing…bc if you continue to just hang on and pray for the best you better believe you may very well end up with nothing and then you will be truly at the end of the line (but nevertheless still a very suitable candidate as a TPE).
http://www.teenentrepreneurblog.com
October 8th, 2008
Me? Curled up in a ball? Never! I am not upset at the economy. I am upset that I have to pay for someone else’s fiscal irresponsibility. I won’t tread down that tangent.
Good economy…bad economy…so what! As long as there is an economy, astute and resourceful entrepreneurs can make a buck. No economy…well…time to barter my friend.
Now is the time to create. The most profitable and sustainable creations (entities, inventions, ideas)solve problems. Look at our current situation, we are long on problems and short on solutions at the moment. So, go forth create and be prosperous.
October 8th, 2008
Great article, I gave it a digg. Everyone should work for themselves! Work Less, Play More
October 10th, 2008
Mike Mike Mike!
I couldn’t agree more!
Not only is this a fab time to start a business, it is a perfect time for companies big and small to take a good look at themselves, leverage these times by making smart creative choices that in turn will empower their employees and guarantee their clients’trust.
Well done!
Janet
October 10th, 2008
I love this article – #6 intrigues me but I guess it’s true – we just can’t live without a little pampering.
October 13th, 2008
[...] in these conditions, so you can really stand out from the crowd. You might also want to check out this post by The Toilet Paper Entrepreneur about why now is the best time to start a [...]
October 14th, 2008
Being your own boss means never worrying about layoffs! I went through one layoff and that was enough for me!
Carpe Diem! If you can get through the bad times, the good times will be great!
November 3rd, 2008
Mike,
Thanks for the great words of advice. I have experienced, as many have spoken about here, great joy in this time of a bad economy as my new business has been put into place when no one else wants to start a business. I actually did a vid on YouTube about this very thing, “Invest When No One Else Will” — http://www.youtube.com/watch?v=-OM8aD706AI
Thanks for your encouraging words, keep it up.
Travis Fitzwater
http://www.FreedFromTheRatRace.com/
November 4th, 2008
An important thing to remember about this economy.
Once lending returns to some sort of normalcy and regular small and large businesses can get lending most solid, (boring) type business will be o.k.
You probably weren’t making money hand over fist because of booming real estate before, but you don’t lose out when home equity rates fail to jump 7% per year. Same with the stock market, yes my 401k account looks bad too, but I have quite a while until retirement, this should be a lesson hopefully no one is just learning. Plan at least 10 years out and start making good decisions when you are getting close to retirement age. I feel for those folks, but geez people, it is talked about every time I meet with my broker, who the heck are you using?
November 5th, 2008
[...] The Economy Sucks. Finally!!! It’s Time to Start a Business! [...]
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March 18th, 2010
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August 27th, 2010
Mr. President;
I appeal to you, after several failed attempts to contact my congressman. The US economy is severely in need of leadership. I urge you to consider my idea for a stimulus plan and convey my sentiments to Washington and your friends and colleagues. I call this plan the “American Re-investment & Innovation Act”.
The US economy requires stimulation for jobs creation as well as an investment in US ingenuity to remain competitive in the global economy. This requires a reinvestment in American Small business on a scale not seen before. This act requires that:
1.) The establishment of Technology incubator programs, administered by the Small Business Administration. The programs require the establishment of Grants (for equipment) and loans for operating capital to small businesses. The program is intended to lead to job creation which provides income to American families. This program requires some basic governing principals.
a.) Grants are available for the purchase of capital equipment. Grants range from $0-$1.5 million.
b.) For every $50,000 in grant money awarded, one job must be created for a period of not less than 18 months.
c.) No applicant may keep any grant money awarded. It must be spent in the same calendar year it is awarded.
d.) Loans are available for operating capital.
e.) Loans range from $1 – $1.5 million.
f.) Operating capital cannot be used for capital equipment purchases.
g.) For each $50,000 of loan money awarded, you must create 1 job for no less than 18 months.
h.) All recipients of grant and award monies offered by this program must make their books available to the SBA for the duration of their program involvement.
i.) No principal(s) of a grant or loan may take more than $90,000 in salary or bonuses out of the business operating under this program for the its duration and involvement.
j. No Principal may transfer funds to another business.
k.) No recipient may hold investments in other companies that may be considered inappropriate or in conflict with their involvement in this program.
l.) Bankruptcy filings shall require a forfeiture of all funds received under this program at any time during the first 24 months of receipt.
This program shall be administered by the Small business administration in conjunction with state and local entities involved in similar programs such as the Texas Emerging Technology Fund. This program is designed to start small companies in the range of 5-100 employees. It is also designed to grow small businesses who need access to capital to expand their business. The program should begin with $250 billion to lend and or grant.
This is how you create jobs fast!