Turn on the TV and all you'll hear is how the stock market still hasn't fully recovered and how unemployment is still rising, so you might think I'm out of my mind to suggest that now is the perfect time to start a business. But I stand by my statement.
If we look at history, more millionaires were made during The Great Depression than any other time in US history and during our last recession in the early 90s many companies still thriving today were born, like Clif Bar.
There are numerous reasons why starting a business now is advantageous, but these are the top five.
1.) Increased Opportunities. Anytime the economy changes or a new technology is introduced it creates opportunities in different fields. While some industries are shrinking, others are exploding. For example, while Chrysler is claiming bankruptcy because their gas-guzzling vehicles have become irrelevant, a San Diego-based company, Jitterbug, who produces simplistic cell phones with extra large numbers on them designed for the elderly is hiring and growing at breakneck speed.
2.) Less Competition. In the first two months of 2009 the Department of Labor reported that over 800,000 small businesses closed. I can guarantee that these were businesses that may have been barely making it when the economy was flush and when the recession began they realized they did not have the proper infrastructure, their overhead was too high or their business model was flawed. These closures create a lot of space for smart new business owners to open and serve their customers.
In addition, many companies have cut their advertising budgets to lower costs which can give the public the perception of fewer businesses offering the same products and services as yours. The perception of less competition allows you to stand out and strongly establish your brand.
3.) Decreased Trust. Let's face it, the big companies melting down faster than Chernobyl this past year have withered the public's trust. It's become obvious that large corporations are not looking out for their employees and many didn't even look ahead enough to protect themselves. Whenever the big businesses that people have equated with security go belly up, it creates a fear-based marketplace. First, people contract and don't buy at all. Then they start wanting to buy, but look to do business with people they know and trust.
People who purchased their lotions and body wash at the mall are now more open to purchasing from their Mary Kay consultant. It feels good to them to know that the money they spend with someone they know helps out that family.
4.) Discounted Resources. With many companies cutting back, businesses want to maintain cash flow so they are often willing to discount their services or products or offer longer payment terms than in the past. These options help a new business owner's startup funds go farther.