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Starting Your Own Business in Tough Economic Times

Almost the entire Western world suffered from the recent recession with redundancies and severe cost-cutting measures at an all time high. And the job losses were not only confined to the hire-’em and fire-’em companies who traditionally shed staff in tough economic times. The latest recession affected employees from large and small companies, from family owned businesses and blue-chip corporations. Even the public sector, usually immune from redundancies, had to make cuts in a way unheard of in recent times.

Many people who have recently been made redundant or are facing the prospect of redundancy in the near future will be extremely concerned about what alternative opportunities await them in the marketplace. Where opportunities do exist the competition for the positions is likely to be fierce. Many job-seekers are faced with the prospect of accepting any job they can find simply to make ends meet and survive without a credit card; and they’ll be looking at ways to either increase income or reduce debt.

But is there an alternative that could continue to pay the bills?

According to a study by a group of North London accountants a large percentage of those fortunate enough to have a generous redundancy payment are likely to be considering investing that cash in their own business. The dream of being your own boss can become a reality with the investment of a redundancy payment and the lack of alternatives on the open job market. And with so many internet-based businesses making an impact in the marketplace there are ways to maximise your financial investment and minimise your risk – it can be the key to financial security. For instance, it is no longer necessary to have a real bricks and mortar location; you can provide professional services from a well-designed website. Even if you plan on setting up a small retail business it is no longer necessary to have the high overheads of warehouse space for your business in which to store your stock. many online businesses simply use a self storage facility for storing their stock – there are no long-term tie-ins and monthly contracts allow you to reduce or expand the space you need so you never pay for empty space as you would if you were renting a warehouse.

But what businesses are most likely to succeed in a recession? And does the person whose whole career to date has been as an employee really have the skills to start out on their own?

According to a recent study, a  good approach to starting your own business is to research all those services or products that are required in both good and tough economic times. Generally high-end luxury goods will survive a recession but the sort of low-end luxuries that middle-income families treat themselves to when times are good are often the products that won’t sell in a recession. Luxury foodstuffs, luxury items for the home, expensive holidays are all likely to fare badly in a deep recession.

If you have ever dreamt of a lifestyle where your hobby was your business, this is unlikely to be that time. But some of the products and services that are always in demand are those that need to be purchased on a regular basis like everyday food, clothing and children’s goods. Products and services related to events that occur regardless of the economic climate such as marriage, birth and death can also be profitable during a recession if managed well. These may not be the type of business you dreamt of but they may be the route to an independent way of life; free from the vagaries of paid employment.

If you think your own business might be the way forward for you then many are relatively easy to start up with little capital outlay although there are always ways to improve you chances of getting a small business loan if you are happy to borrow to get started, becasue, after all, there is such a thing as “good debt“. Below are just some low budget ideas for recession-proof businesses – ones that can survive a recession and boom once the economic climate improves. So if you are ready to pack up your office job and go it alone, here are some ideas:

  • Photographer – for those all important events in life that just will not wait until the recession is over.
  • Greetings Cards – birthdays, anniversaries, special events etc occur year in year out.
  • Training and Mentoring – if you have skills and experience in any business area there are opportunities to train groups or individuals whether it is simple skills such as business blogging or more advanced skills there is always a need for good coaching.
  • Car or Van hire – whether to save on regular vehicle maintenance costs or to test the water on a new business idea.
  • Baby Goods – a recession just will not stop that patter of tiny feet
  • Children’s goods – clothes, toys, books etc. Parents will often spend spare cash on their children in preference to themselves.
  • Basic food, sandwich shops or services etc
  • Basic clothing, school uniform and sports goods for people who want to look good on a shoestring budget as there are plenty of people who want to dress well for less.
  • Home entertainment – televisions, DVD players and music systems play a much more important part in our lives when entertainment outside the home is less frequent due to restrictions on our budgets.

These are just a few ideas for starting a recession-proof business, there are many more options for a successful business to start up in a recession. Simply consider what you would buy and what you would do without. Or alternatively target the very upper end of the market where customers are not so affected by a recession.





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