With businesses and storefronts shuttering in nearly every town, you might think now is the worst time to start up that small business you've been mulling over for the past few years.
But experts say now's the time. Not only is there less competition, but also now more than ever, there's room for new ideas.
Does that mean you should march down to a vacant storefront and sign a lease, or quit your day job and start printing business cards? No. But you do have the green light to start thinking about how to put your idea in to practice, says Susan Urquhart-Brown, a career and business coach and author of "The Accidental Entrepreneur."
"Don't go into business if you don't have an idea, or if it's very fuzzy. Right now, you need to be very clear about what your business is. That's the first step."
So what are the next steps?
Look at your finances. "During your start-up year, there's very often more money going out the door than coming in," says Urquhart-Brown. Your income from that venture is going to be farily limited for a while -- perhaps even non-existent. While you're getting off the ground, you should absolutely keep your day job or at least work part-time. That way, you have a salary to keep on funding your lifestyle and all that comes with it -- the mortgage or rent, food, clothing and other necessities. You'll also have something to fall back on if your idea should fail, a possibility that is hard, but necessary to consider.
One other thing to note: I know I go on and on about emergency funds, but it's for good reason. You need to have one at all times, and it should hold at least six months' worth of expenses. But if you're starting a new business, aim to cover your expenses for nine months to a year.
Focus on your talents. There are a lot of perks to entrepreneurship, and being your own boss definitely tops the list. In many cases, you can work from home and set your own schedule. But these shouldn't be the primary draws. You need to have a passion for the business you start, and that's different than just the drive to make money or the desire to avoid cubicle life. "I think the best opportunity is where your skill, ability, talent and interest lies," says Ken Yancey, CEO of SCORE, a group of retired small business owners who provide free entrepreneurial advice. If you do not focus on something you not only enjoy, but also excel at, your business has very little chance of succeeding. So take some time to examine the idea you have, and think about how you will put it into practice, whether you'd be happy if your work life revolved around it, and whether you ultimately will be able to pull it off.
Do extensive research. Start by looking at what's needed in your marketplace and whether or not your idea will fill a void. If your town has two pet shops, there's no sense in opening a third. But say you live in an active community, a place where people put an emphasis on their health -- there's a natural foods store on a few corners and a gym on every other block -- and there aren't any nutrition consultants, you might have found a niche. Once you've done your market research, talk to people in similar fields about their experiences. "That way, before you get started, you can get the pluses and minuses of your particular field. You'll know what to look for, and the priority steps to take when you're starting up," says Urquhart-Brown.
Look at funding options. You need money to get anything off the ground. I've had more than a few guests on my radio show tell me that they started their business with as little as $5,000 -- including Sara Blakely, the founder of Spanx, a female clothing line -- so I know it's possible to get going with very little capital. But you're going to need some cash, and you need to decide how and where to get it. If you have the money available, self-funding is a great option. "When you self-fund, you buy yourself the ability to control the vision of your business, and to really understand the economics of your business," says Cari Sommer, who co-founded Urban Interns, a company that connects small businesses and professionals with interns and assistants. If you don't have the liquidity, try a small business loan or an individual investor. In either case, be prepared to fully explain the idea behind your business and why it will be a success.
And of course, don't quit that day job. I'm a big proponent of moonlighting -- at least for a little while -- to make sure all your bases are covered before your brilliant brainstorm can take off.
With reporting by Arielle McGowen
Jean Chatzky is the financial editor for NBC's "Today," a contributing editor for More magazine, and a contributor to "The Oprah Winfrey Show." She is the author of six books, including the book The Difference: How Anyone Can Prosper in Even the Toughest Times (Crown, March 10, 2009). To find out more and to read her blog, visit her Web site, http://www.jeanchatzky.com/
