It's risky starting a small business. No arguing about that. If you're already out of work in this tough economy, however, and you have a little money saved so you don't need to worry about your lights getting turned off, this is a perfect time to start one. Many large businesses; Microsoft,Google and General Electric being three examples, were all started in recessions.
To weigh in on the topic I asked my client Christy Strauch and author of the new book Passion, Plan, Profit: 12 Simple Steps to Convert Your Passion into a Solid Business to give me her take on starting a small business in a tough economy. Christy is president of Clarity To Business and has worked with over 300 small business owners, from artists to real estate agents, helping them do what they are passionate about -- and make a profit.
Q. Is now a good time to start a small business and turn your passion into profit?
A. Yes! The ironic truth is that a successful small business is actually less risky than having a job. When you are employed, you have essentially one customer: your employer. All your risk is concentrated in that one customer. You have to make very sure your one customer is happy, all the time.
Q. But turning a hobby into a small business is risky too?
A. It is, but when you own a business, your risk is spread over 25, 50 or even 100+ customers. If one gets upset, or moves, or leaves for some reason, you have all your other customers to fall back on. Your risk isn't concentrated in one person. The trick then is to get your business to the point where it has a diverse group of customers, not just a few. Luckily, cultivating relationships with customers is what we do best in small businesses.
Q. If you think you want to start up a business, no matter what the state of the economy, waht should you do first?
A. Go out and start talking to potential customers. Do these five things:
1. Tell them your plans for your business and see how interested they are.
2. Sell your goods and services to them and get their feedback.
3. Do pilot programs and get feedback.
4. Test your products on customers and get feedback.
5. Did I already say, "Get feedback?"
Q. It seems like starting a new business, especially now might create a bit of pressure?
A. "Pressure" is in the eye of the beholder. If you like your products and services and enjoy delivering them to people and getting paid, it might be time to apply a little "pressure" on yourself and start your business.