The best way to fight the forces of economic downturn is to start your own business. Many economists, business experts, and news media have been talking about the dangers of going into a venture at this point. They feel that many who would are holding back for better conditions, that you would be crazy to start a new venture in this time of increasing taxes and economic recession. Maybe the opposite it true, for a lot of reasons.
Yes, raising capital is difficult in this environment and it is more difficult to find private investors who may be willing to take a risk in something new, but that shouldn’t stop you! You don’t always need capital to start a venture and many successful startups didn’t receive good capitalization until they had contracts worth investing in. Microsoft is an example but of course it’s also the exception in a lot of ways so I won’t try to compare.
Right now may not be the best time to start a broad venture that requires a huge capital outlay that could take years to recoup. Instead it is a great time to take advantage of lower cost entry in small business that you feel may be leveraged into a larger business later. It’s never too early to start because momentum matters when you finally get to the point of viability to larger investors. Getting your business up and running, creating a gross revenue stream, building some brand awareness, and getting feelers out for future partners and employees is key to success.
One area of expense that is currently discounted to a level that favors small business owners/entrepreneurs is labor. The labor market is creating cheaper workers at all levels. If your business is blue collar then you should be able to find plenty of employees since there are about 5 people for every job opening. In addition, if you are unemployed, then you are also your cheapest labor to start off. Take advantage of your own low cost! In getting started it isn’t likely that you will need more than yourself to design and develop your venture. There are a lot of profitable service business opportunities for those who would like to do the work.
In effect, if you at least start a business for yourself you are helping the economy directly by taking 1 out of the labor pool. If you are successful then you will likely take 2-3 more people out of the labor pool just to run your own mom and pop business. There are many other benefits to owning your own business; it truly is the real American Dream and owning a home is just a symptom of success, not the dream. As a business owner you gain many freedoms, the ability to write off expenses to some degree, the ability to determine your own direction and customers, as well as your own hours and vacation time.
Why waste any more time? Just start a SMID and enjoy a potentially better future, even if you are currently employed. You can work from home, on a computer, or some other freedom based method!