Entrepreneurs can turn economic crisis into opportunity
The first thing on an entrepreneur’s wish list for the new year is undoubtedly a healthier economy.
Unfortunately, most experts predict a more robust environment may be many, many months away. So the question becomes, how do entrepreneurs make their own economic outlook more positive in ways they can control?
Before offering some suggestions to answer that question, we should consider some recent research conducted by the Kauffman Foundation in Kansas City. In a survey completed in September, Americans reported overwhelmingly that they believe entrepreneurship is the solution to the current financial crisis. In fact, more than 70 percent of respondents indicated they believe the health of the economy depends on the success of entrepreneurs, and 80 percent want to see the government use its resources to actively encourage the development and growth of entrepreneurship in the United States.
That’s the good news. The not-so-good news is that many Americans are reluctant to start their own businesses, particularly in the recent two years under the looming cloud of the current economic crisis. More than 70 percent of those responding to the survey believe the economic crisis has just made it too difficult to become an entrepreneur. Nearly 50 percent see opportunities; only 26 percent said they would actually consider pursuing one of those business opportunities within the next five years. Nearly 65 percent think the crisis is going to hit Main Street particularly hard.
According to the survey, Americans are looking to entrepreneurs to lead the nation out of the recession. They understand that entrepreneurs are the job creators. Fifty-six percent of those responding trust small business owners to lead the economy of the future; only 14 percent think Congress can be more adept at solving the current problems. While many think the government can do more to help entrepreneurship, they add that public assistance must be balanced against the fear of greater governmental regulation, which would not be as welcome.
Entrepreneurs are good problem solvers. Now they are finding ways to turn this crisis into an opportunity. Here are some strategies that can help.
When times are tough, people are more willing to find deals, strike partnerships, negotiate nearly everything.
Be creative about your financing. Keep your credit rating in top-notch condition, as money is going to be harder to get, particularly if your financial history is marginal. Entrepreneurs are going to have to rely more on friends, families and far-out sources of financing, such as environmental foundations that might assist with green business start-ups. Investors may be looking for opportunities other than those in the stock market.
Slow seasons are a perfect opportunity to retool. Revisit the business plan, the marketing strategy, the customer relationships.
Think of new applications for your product or service. Reach out to the University to find a student team of future of entrepreneurs, engineers and marketers, and ask them to brainstorm on new markets for what you do best.
Stay positive. Nothing can send things south faster than buying into negativity. The outlook may be cloudy right now, but an attitude of possibility will take you much further than sitting still and just taking it on the chin. Keep moving, and keep looking for the next idea.
Market aggressively. Upgrade your Web strategy, and look into social and online marketing techniques, which can be implemented at relatively low cost. Co-market with your small business colleagues. Many experts are predicting that the new presidential administration will enhance consumer confidence and assistance to small business owners. You want to be prepared to take advantage of that should it occur.
A recent study from the Angel Capital Association reports that while investments have decreased in 2008 and will continue to decline somewhat in 2009, some groups are actually increasing their activity and believe they will continue to make more investments in new opportunities that arise in healthcare, environmental technologies and business ideas born from the economic crisis. The next year will be one of “creative destruction,” in which new opportunities arise from the ashes of the current conditions.
Recessions end, and when they do, those left standing through prudent management, creativity and optimism can look forward to a better day. True to form, Americans believe that things will improve. More than 75 percent of the respondents to the Kauffman Foundation study believe that they are or someday will be living the American Dream.