Risking It All: Starting a Business in a Down Economy

The recession was pronounced “over” in October, but starting a small business in this molasses-like economy can still be very difficult to execute. In fact, in a recent article by CNN Money, it was discovered that small business failure rates rose by 40% between 2007 and 2010. Although following your dream may be tough, there are certain steps you can take to increase your chances for success.

The first step is to see if there is a need or demand for your product or service. Do some keyword searches (both broad and specific) using the Google AdWords Tool to find out if there is a demand for your product, whether it’s on a local, regional, national or international level. Before founding a company in this economy, you need to make sure that people will be able to afford your service, and will want to own or be a part of it as well. If there’s already something out in the public sphere that is similar to your product, do some research and find out everything you can about it. How would you make the existing product or service better? For example, if you’re starting a pizza restaurant, show that you’re better than the other restaurants by having day-specific discounts, and adding unique flair that will set you apart.

The key to customer acquisition in a small business is to show that you’re different, yet also competent. If you’re still unsure as to whether people will want your product, roll out a test campaign on a local level with friends and family to see if they like the service, or if there are areas for improvement. This step is great, as you won’t spend all your money before you know whether there is a need for your product.

The next step is to create a distinguishable identity for your new company. If your service is quality, people will come to associate your company name or logo with terrific products. This step can take years to develop fully, but the best way is to begin with the basics. Well-developed business cards are the gatekeepers to overall company awareness in the public sphere.

The next step is to link your business card to your virtual world by adding a social network into the information section of the card. In the world of digital prowess, social media is one of the most powerful weapons you can have. From enhancing search engine rankings to generating company awareness, social media can greatly impact your start-up business. In fact, a recent study was done by HARP Social confirming that 53% of Twitter users mention or recommend companies or their products in their tweets. This process is usually easier for the person if the company they want to mention is on Twitter. You should also create a strong voice in the community sphere you hope to sell in. Whether that means writing blog posts, or getting involved in trade shows, you should be active in the community to put a friendly and knowledgeable face to your company.

The last step is one that should be done before you begin marketing your idea. In a down economy, creating a free website is the best way to broadcast your message without spending any money. Using a free website builder that doesn’t sacrifice design options will assure you that you’ll be able to make the best website for your business. There should be separate pages for your product, employee profiles, links to social media, and perhaps even your blog. Your website can become the hub where your customers go to find information about your company.

When creating your own small business in these trying economic times, you must remember to keep your confidence up, and to maintain a professional appearance. Believe in your product, and as long as you know that it’s quality, people will soon know it as well. Remember to test out your product first, create a solid identity for your company, and actively promote your service through whatever positive means you can. Your first customers may also be valuable assets. Reach out to them and see if they wouldn’t mind doing an online write-up or testimonial about how wonderful their experience was with your product. Once you acquire those first few customers, more will come. Even though the economy may be down, following your dream does not always put you out.