An Economic Downturn Can Be a Great Time to Start a Business
Really? It sounds strange, but think about it.
- Costs are lower.
- More workers are available and looking for work.
- Potential customers are looking to cut costs and are more likely to give a new supplier a try.
- The competition is likely focused internally on cutting costs themselves, and perhaps not giving much effort to marketing.
The one difficulty left to face is . . . . capital.
Lenders and investors are very careful about who and what they invest in during a downturn. You may have a savings account, a home equity line of credit, credit cards, or other sources of cash to start up a business. This is well and good. But if capital is short, your plan of attack to attract that capital needs to be a very well prepared business plan.
Four Ideas For a Better Business Plan
- Be Thorough. Cover all of the details of your start-up business. Go to http://www.citizensmn.com/business/getting-started/how-to-prepare-a-business-plan.html for additional information on this topic.
- Use Candor. No one wants to hear that “we are the best” and “everything is wonderful”. Identify your critical factors for success, and tell why you are uniquely qualified to succeed, even if your future success is based upon past failures. Don’t be afraid to identify your weaknesses, and how you plan to address those.
- Be Conservative and Identify Contingencies. Everyone knows that initial sales projections are difficult to meet. Thus, give a solid basis for your underlying assumptions, and show a “worst case”, “best case”, and “most likely” case scenario.
- Make a Case for Why You’ve Built the Better Mousetrap. In other words, there has to be a reason that the public will change their behavior and buy your product or service over what they are currently doing. What is that reason? What will incent customers to use your mousetrap? Does it solve a problem? What is that problem?
For Further Reading
These related books will inspire you to find your niche and transform your business into something unique and lasting:
- Purple Cow, by Seth Godin. Transform your business by being remarkable.
- Good to Great, by Jim Collins. Why some companies make the leap… and others don’t.
- Thank God It’s Monday, by Roxanne Emmerich. How to create a workplace you and your customers love.
By: Julie Baumgartner, Vice President
Citizens Bank Minnesota 
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