10 Reasons The Best Time To Start A Business Is During A Downturn

Recessions are hard times. People lose their jobs, companies get wound up, and the lucky ones take the losses from their cash reserves. While the U.S. may not technically be in a recession right now, there’s still plenty of uncertainty and talk about dark clouds on the horizon.

1. People want innovation

Recessions create problems. They also slow investment in innovation down. Consumers and businesses are looking for solutions to problems which presents opportunities for startups to solve.

2. People want to save money

As a nimble startup with few expenses, you should be able to undercut your competitors. Their clients will be watching their wallets and looking for cheaper alternatives, so it’s the perfect time to make a sales pitch to win them over. Do a good job, and you’ll keep those clients when the economy recovers.

3. Incumbents are vulnerable

Whether they’re giant corporates looking to scale back and hibernate through the downturn, or smaller companies that might not have the resilience to see out the storm, your competition is in a vulnerable state. Startups are agile and flexible, and as long as you can support yourself with your minimal overheads, it’ll be hard for the economy to chew you up and spit you out.

4. Good people are looking for work

If you’re able to secure funding, or grow your business rapidly, you’ll probably be looking to increase your headcount. But finding the right staff is really, really hard. In a downturn, when layoffs are rife, highly qualified, talented and effective individuals can be found much more easily than during the good times.

5. Things are cheaper

Weak economic growth means ailing businesses are selling off certain assets.  Put more simply, things cost less. Your typical overhead costs such as office space, or one-off purchases such as office furniture, tend to have lower base prices, and vendors are more likely to discount prices to move stock quicker. Even the good people you find in point number three come cheaper, demanding a lower salary and less benefits than they might in a strong economy.

6. Lower interest rates, mean cheaper credit

Not only do things cost less, the central banks of affected countries generally start to drop interest rates to keep consumer spending high. This means that loans and particularly credit cards may make more sense for your business in its early days, compared to the high interest rates used to control inflation when the market is strong. I was able to start DesignCrowd.com off the back of a credit card.

7. You will have less competitors

When the economy is strong, every man and his dog wants to startup. Many of these budding entrepreneurs go straight for funding and eventually squash the bootstrappers. There are less people trying to startup in a downturn because there’s less funding about. This makes it easier for those who are keen bootstrappers — those who want to control ownership in the company, and don’t have to split the pie with bankrollers.

8. Smart investors want to invest

But if you need funding — perhaps there’s plant and equipment costs that can’t be avoided — there’s still plenty of determined investors who are looking for new business opportunities. When the economy falters, angel investors in particular, look to move their money out of the stock market and may be willing to fund you if your prospects are promising.

9. Downturns give startups negotiating power

Traditional vendors have trouble moving product when the economy is weak. If your company depends on products from suppliers, a downturn is a great time to negotiate or renegotiate a deal that will benefit you even after the downturn ends. When the economy is strong, a startup is just another startup, and the vendor sets the rules.

10. You’ll build a lean startup with good habits

A startup built during the tough times is designed from the ground up to be a lean, mean, efficiency machine – whether you’ve bootstrapped or not.  These habits should stay with you when the market recovers, giving you higher profit margins since you’ll be able to lift prices once consumers and clients are spending again.  If you can build and grow a business when consumer confidence is down and businesses are tightening their belts, your business will be bullet-proof when things improve.

Source:http://www.forbes.com/sites/realspin/2013/07/24/10-reasons-the-best-time-to-start-a-business-is-during-a-downturn/

Other sources:

http://www.business.qld.gov.au/business/running/risk-management/surviving-economic-downturn/strengthen-business-economic-downturn

http://toolkit.smallbiz.nsw.gov.au/part/23/121/559

10 Qualities Of A Successful Product

The 10 Questions

  1. Does it have unique features? You can’t roll out the “same-old, same-old.” Your product has got to have a cool new look that’ll make the consumer sit up and take notice.
  2. Does it have mass appeal? In other words, is it something that will sell to the stay-at-home mother of four as well as the seasoned fisherman?
  3. Does it solve a problem? Think of something around the house that’s troublesome and invent a solution. If your product doesn’t solve a problem, you’ve got a potential problem – consumers aren’t as likely to buy it.
  4. Is there a powerful offer with a supportive cost of goods? The time-tested pitch– But wait, there’s more! – is a proven winner. The key is great value at the right price. In today’s world, people immediately check the Internet for the same product at a cheaper price.
  5. Can you easily explain how it works? There has to be an easy-to-understand explanation of how and why your product works. Get your elevator pitch ready. If it takes a college degree to understand the pitch, it’s too complicated. You only grab people for a couple of seconds – so you have to tease, please and seize the consumer.
  6. Is there a magical transformation or demo? Before-and-after spots – showing easily noticeable differences – are powerful marketing tools.
  7. Is it multifunctional? Think like your competitor. If you come out with a product that has just one function, your competitor can steal your thunder – and your sales – with a similar product that offers more functions.
  8. Is it credible; are there testimonials? An “actual customer” promo is ten times better than any “actor portrayal.” Real people offer real results. But you should also seek out professional testimonials from industry associations, doctors and other “experts” in your industry to further build your product’s credibility.
  9. Are there proven results? Be prepared to back up your claims with unshakeable success stories or scientific studies, including third-party clinical studies or reviews from product-testing labs that support your claims.
  10. Can you answer the questions the viewer is thinking? You must be prepared for any and all questions that could arise over your product. Put yourself in the shoes of consumers, and think of all the questions they could ask.

If you answered YES to all 10 of these questions, you’ve got yourself a product that’s so solid you won’t even need a celebrity endorser to make it fly off the shelves.

Source:  Kevin Harrington from Forbes

How to Promote Coffee Business

Running a coffee business can be daunting and normally need proper concentration and time. Small time is left with making new marketing ideas even if people all know how essential this is.

Normally competition is relatively high and it is so essential for you to stand out from the rest.

How to promote coffee business is not an easy task, most especially if your business is located in a place wherein competition is high. This article will aid you with some promotions and marketing ideas for your coffee business.

Read on below

http://www.startupbizhub.com/how-to-promote-coffee-business.htm

Questions

  1. What ways can a coffee business use differentiation strategies?
  2. What ways can a coffee business use pricing strategies?
  3. What ways can a coffee business use promotion strategies?

Small Business Case Studies

 Case Studies

Pricing for market expansion

Establishing limits in accommodating employee’s needs

Managing staff turnover

Is market research critical in new export ventures?

Taking care of your cash flow means caring for your business

Maximising customer retention through strong customer relations

Developing marketing strategy

Happy clients bring more business

Do promotional tools really matter?

Moonshadow Cruises – Target marketing

Sydney Cricket Ground Tour Experience – Target market

Sydney Harbour YHA – Target market

High n Wild Mountain Adventures – target market

K7 Adventures – target market

Understanding your online customers

What happens when OH&S standards are lacking?

Sourcing and applying for finance

You will be allocated a case study in groups.  You will be asked to report to the class:
– Brief overview of the problems/ challenges / issues
– What strategies were used to address the problems/ challenges / issues identified above?
– Suggest where the strategies should be listed .