SmallBizResource Blog -- Economy

10 Reasons Why Now Is The Right Time To Launch A Business

Posted by Gayle Kesten Monday, Oct 6, 2008, 02:29 PM ET

The Dow just took a major dive, Congress last week passed an $800 billion bailout program, credit is tight, and VC dollars are scarce -- so you'd be crazy to start a business now, right?

Maybe not, according to Peter Justin, president and CEO of MyBizHomepage, which counsels start-ups and small businesses and provides free online tools to help them keep on top of their finances. "Many people think that starting a new business in a slowing economy doesn't make sense, but for many businesses, there are advantages," he says.

Big picture: Start-ups are finding themselves able to call the shots in terms of reduced rates for a variety of business needs. Here are Justin's 10 tips for those ready to set up proverbial shop:

1. Heavily negotiate the lease. Real estate is slowing in most regions of the country, which allows for small businesses to get retail, office, and warehouse space at reduced costs. It's also easier to negotiate for landlord build-outs, signage, and parking.

2. Find great used furniture and office equipment. Take advantage of the many companies who ramped up too fast and find themselves with offices of new furniture and equipment to sell at a fraction of what they paid.

3. Capitalize on less business competition. When the economy tightens, fewer people are likely to start businesses. This means that you can do a competitive regional analysis and know that your niche is protected, for a while at least. Grand openings, ribbon cuttings, and ground breakings are likely to get a lot more media and general attention.

4. Make the most of less advertising competition and reduced rates. When you spend money to advertise your new company, you'll have greater visibility since there are fewer companies advertising in a slow economy. You should also be able to negotiate advertising rates.

5. Benefit from reduced marketing costs. In a down economy, writers, designers, and agencies are often looking for work and are able to offer reduced rates.

6. Pursue available media coverage. Local press will be more likely to cover a start-up when it's one of just a few. Send story ideas and pitches to your local business reporters.

7. Take advantage of greater loan availability. With fewer start-ups, there are fewer companies vying for start-up loans from banks and Small Business Administration grants. While a tighter economy means tighter lending, too, less competition should make it easier to get money from lending institutions, assuming you have stellar credit.

8. Scout out bank rates and services. Shop your local banks for the best rates and services. You can often negotiate lower interest credit cards and corporate accounts.

9. Profit from an enhanced employment pool. In tough times, businesses lay off good employees who are often willing to accept pay cuts for employment with a company that offers other benefits-improved commute, improved lifestyle, interesting work, etc.

10. Network harder than ever. As one of only a small number of start-ups, use this period of downturn to get out and network with all of the companies and executives who can be mutually beneficial to your business. For instance, in a slow economy, you may find that executives, bank officers, etc., you wouldn't normally have access to are attending local chamber breakfasts and business receptions. Use this to your full advantage.

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