Despite recent indicators to the contrary, many Americans are still not convinced that the economy is recovering. While the job market is regaining its health, according to recent news, recovery from the recession has been slow. Many job seekers still face tough odds—for every job opening, there are more than four Americans out of work. As long as demand continues to outpace supply, your ideal corporate job may not exist—or not be available—at least for now. One potential solution—indulge your inner entrepreneur and start your own business.
If you started a business now, you wouldn't be alone. Many well-known companies got their start in a down economy. Hewlett-Packard, General Electric, Microsoft, Burger King, IBM, CNN, FedEx, Whole Foods, Disney and General Motors all started operations during a recession or depression. According to USA Today's Rhonda Abrams, more than half of the 30 companies that make up the Dow Jones Industrial Average first opened their doors during a recession or depression. The same goes for product launches. These household brand names were all unveiled during economic downturns—Apple iPod, Microsoft Office, Clif Bar, Dawn Soap, Revlon and Hershey's Kisses.
So what could you do? Some inspiration from Dr. Diane Badame, Assistant Dean and Marketing Professor at USC's Marshall School of Business: “What is really needed in today's economic situation is better solutions to business problems,” she says.
If it's not only possible to launch a new venture during shaky times, but even to become a household brand, what's stopping you? Here are few reasons why economic slumps can be the right time to get you motivated:
- Time and opportunity. If you find yourself unemployed, you have two things that you previously had in short supply: time and opportunity. Rather than devoting any time to daytime talk shows, spend those valuable hours researching opportunities and pursuing your dream.
- Cents on the dollar. If you've applied for a job recently, you may have had to consider a pay cut. What can be a negative for a job hunter can become a positive an entrepreneur. Lower costs for supplies and rent and lower employee wages can all help lower the costs of starting and running a business. Whether you need labor or just a desk to open your new office, in a down market, deals abound for the tools and services you need to get your business up and running.
- Customer loyalty? Not so much. Not surprisingly, potential customers in your target market have likely become cost averse in this economy. In tough economic times, it's difficult for the average consumer to maintain brand loyalty when price is suddenly an issue. If you can offer your product or service at a superior quality and competitive prices, undercut competitor pricing, or just out-market the competition, you can win over an army of price-conscious customers.
- Outsource yourself. When companies lay off staff, they frequently look for less expensive ways to get the same work done—and your service or expertise might be the answer. By becoming a contractor or consultant, you become a lower-cost alternative for them (for companies, that translates to project-based, short-term contracts and no benefits)—and get the added benefit of becoming your own boss.
- First-mover advantage. In marketing, first-mover advantage is the competitive edge gained by being the first-moving occupant of a market segment. If you can establish a place in the market and make a name for yourself, you'll be in a better position to take advantage of a more positive economic climate than the competition as the economy turns around.
Dr. Badame's advice? Look at executive education and learning as opportunities to fill the gaps in your knowledge. “There is no better way to gain the tools of critical thinking, analytical problem solving and being able to look at things differently other than continuous learning through education.”
Whether or not it's the right time to start a new business, it takes doing your homework. Sometimes, an economic downturn can expose opportunities and niches in the marketplace that you might not have known about otherwise. If you find the right opportunity that you're passionate about, run with it—you never know where it may lead.
With classes on management, strategy, international business, leadership, logistics, finance and accounting, and more, USC Marshall School of Business Executive Education can have you educated and business-ready quickly and at a fraction of the cost and time of graduate school. LegalZoom customers get 10% off business classes.
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