Small Business Startup Advice
posted in Bricks and Mortar Business |As layoffs mount, the number of small business start-ups is on the rise too. According to research by Rob Fairlie, professor of economics and finance at the University of California at Santa Cruz (on behalf of the Kauffman Foundation), an average of 3.4 million new businesses were launched on average in the U.S. each year between 1996 and 2006. In 2007, that number jumped to 3.9 million. While 2008 figures haven’t been released, even more new entrepreneurs seem to be taking the plunge. “I have absolutely seen an uptick in the number of people who are attempting to start businesses of their own since the start of this recession,” says Janet Siegenthaler, a start-up consultant based in Fairfield, Conn. Before you liquidate your 401(k), check what these 10 recession-born entrepreneurs–many of whom have not yet posted a profit–had to say about starting businesses in the last 18 grueling months.
Sometimes it’s hard to predict where you’ll find your niche, so it’s a good idea to create a small business startup that encompasses a couple of different areas. For example, Dan Wiley, a 48-year-old first time entrepreneur, started a Los Angeles based firm that provides a range of services from public relations and advertising to branding and internet design. “I never expected we would be doing as much website designing as we have been, and that so few customers would be looking for our public relations services,” Wiley admits. His advice to aspiring innovators is to save up a year’s worth of operating capital to cushion the blow, should things not work out as anticipated.
It can be difficult to start a small business during a recession, when consumers are trying to cut corners. In August of 2008, three friends — Jonathan Miller (28), Maria Sutanto (27), and Jonathan Kelley (27) launched “Element Bars,” custom energy bars with just $50,000 in combined savings. “We’re on the wrong side of customers who are trying to trade down,” says Miller. “To combat tightening wallets, we’re trying to do more marketing with coupons.” He advises to start small and test the demand for your product, leaving yourself room to grow, rather than trying to immediately manage a multi-million-dollar headache.
“We had to delay our launch since we didn’t want to have a product on the market without a web presence,” says Monica Murphy, who markets the High Heeler, a rubber stop device that fits onto high heeled shoes. She relates that sometimes the toughest part of launching a small business is finding a web designer who shares your vision and is willing to work with you. “Everything costs twice as much and takes twice as long as you plan for,” adds business partner Becca Brown. “No one else will be as invested in your business as you are,” Brown warns, “so don’t expect everyone to follow through when they claim they can help you.”
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