What Type Of Business To Start In A Bad Economy? Challenge #2
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.
Tags: bad economy, economic downturn, growing small business, marketing plan, performance strategy, small business growth, Starting Your Own Business