Can’t sleep at night because you think the great depression will shatter your startup dreams? Fear no more - Recessions are actually a good time to start your business (and not only because you can buy cheap Aeron chairs from all those companies which went bust). Inc. Magazine (yeah, yeah - I know… I’m obsessed with them) recently ran a good article with case studies on companies which were founded in a recession.

Some of the main points why it’s actually a good time to start a company are:

• On Sales: Downturns are actually a great time to sign up new accounts. That’s because companies are examining every expense for ways to save. If you can offer a better price than their current vendor, you will have a decent chance of winning their business.
• On Hiring: If a local company has layoffs, call its HR department. You may be able to work with the company or with its outplacement agency to identify seasoned workers who would be interested in joining your start-up or working for you on a contract basis.
• On Bootstrapping: Barter. Existing businesses will be looking for ways to put their excess capacity to use and may be willing to work with you. Online bartering exchanges, such as BizXchange (bizx.com), have listings for services like IT help and logo design.
• On Pricing: Offer a discount to customers who pay up front. They save money, while you get what every start-up needs, which is cash flow. (You may want to cut a deal with only one or two customers, however, to avoid being tagged as a discounter forever.)
• On Terms: If you can afford it, offer customers generous terms. If they are used to paying their vendors in 30 days, offer 60-day terms. Their current suppliers are unlikely to be as flexible, which means you will be offering the client something unique.

The article is definitely worth reading if you’re starting up your company right now. And fear not - better times are ahead of us. Promise.

Posted in Entrepreneurship