In the previous post we looked at the first challenge of what type of business to start in a bad economy.  The first challenge was to determine if you have a market with some depth for your product or service. 

Challenge #2 is about how vulnerable the market, you wish to pursue, is to economic cycles.  Most products and services can and will be affected by economic cycles.  The key is how large are the fluctuations will be. 

Of course, that is hard to know.  But, I would suggest that you research some history of how your market fared during previous economic downturns.  If your product or service falls more into the category of a “want” rather than a “need” then the probability of failure is increased. 

But, that is not always the case.  Let’s look at the leisure or recreational industry.  You may say, and correctly so, that leisure or recreational activities fall in the “want” area.  Yet, people still are going to do something to enjoy themselves.  Very often they will possibly go to more movies instead of concerts because of the expense.  Or, travel may be limited to seeing things in their immediate area as opposed to a large or expensive trip.

The goal is to find a market that will still be needed during a downturn.  Basic services such as cleaning, caretaking of others and bookkeeping are examples of services that should see a reduced negative impact during a downturn.

When starting up your own business, especially in a bad economy, you will move ahead much more quickly if the down cycles are shallow.   A successful performance strategy demands this.  And, to have more consistent small business growth it is critical that you know as much as you can about your market. 

Growing small business is not just about having a great marketing plan.  It is about having a product or service that is needed or will be in demand even when economic times aren’t good.

With the current economic downturn there are challenges and there always opportunities.  The biggest challenge when one is displaced or loses his or her job is:  What am I going to do? 

It is a question I hear a great deal.  Very often, the answer to the challenge is to start your own business. 

You can read a mountain of information that will tell you about starting your own business.  And, that is good.  Yet, regardless of how much you read and learn starting your own business and running your own business present their own unique challenges. 

Today’s post is about giving you a framework in which to think about the question of what type of business to start during an economic downturn.  In subsequent posts I will provide some answers to the questions.

Challenge #1—Do you have a market for the product or service you wish to provide? 

Challenge #2—Is the market you wish to pursue vulnerable to economic cycles? 

Challenge #3—What should you get into when in an economic downturn? 

Challenge #4—What should I stay away from?

Obviously, there are many answers to what business should you start during bad economic times.  The most important thing now is to ask the above questions and come up with your answers.  There are no right or wrong answers.   The only wrong thing to do is to not think about these questions. 

To change your life you must change your thinking.  Coming up with answers will help change your thinking.  In the next post I will give you some possible answers to help guide you.