It’s a Good Time to be an Entrepreneur

Doom and Gloom?

Let’s get the doom and gloom out of the way first. There are a million reasons to be concerned about starting a business given the state of the economy. Perhaps the biggest fear is driven by the fact that banks and VCs are cutting back on their investments. While this is true, low interest rates are compelling people to find alternative investment opportunities with decent returns. And there are still many angel investors looking for great opportunities.

Entrepreneurs need to remember that access to external sources of capital is not the only success driver of a new business. In fact, 99% of businesses are bootstrapped. Granted, not all start-ups are successful; but if you have a solid business plan then you have a better chance of success.

Less Competition

It’s a good time to be an entrepreneur because the economic crisis is killing off competition. Companies that were unprepared to go lean or that didn’t properly hedge their risk are dying off. Less competition means more opportunity. This is a great thing for entrepreneurs if they can find a niche or opportunity in industries that are struggling. The entrepreneurs that do launch in the face of such “adversity” will have an easier time finding customers.

Agility is the Best Defense

Being a small company can also be a good defense against the downturn. Many of the big firms that can’t survive the economy are unable to do so because they are too bureaucratic. It takes them too long to execute. But smaller, more agile start-ups are able to adapt to trends and defend against crises much faster than their corporate counterparts.

Cheaper Resources

At times like these, resources are less expensive. Entrepreneurs can find great deals on equipment during a financial famine. And there are a lot of people who have been laid off that might be willing to work for less. Companies that are starving for business, such as commercial real estate firms, are more inclined to negotiate a deal or a discount on property leases. This will contribute to lower start-up costs.

Focus on Your Core

If you can stave off the crisis your company will be positioned for stronger growth when the economy rebounds. One of the best ways to survive is to cut back on the frivolities, such as unnecessary operations, and focus on your core competency. If innovation is your bread and butter then invest in new product development. If legendary customer service is your founding principle, remind your customers using a revamped marketing campaign. Or if streamlined operations are what set you apart, cut out the marketing pork and invest resources in faster production. By focusing on your core your organization will be well-positioned to capture more of your market once the economy turns around.

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