How to Become a Small Business Owner in Any Economic ClimateOct 06, 2020
99.9% of businesses in the US are small businesses. Currently, there are over 30.7 million small businesses. When you consider this number, it can feel daunting and maybe even intimidating, especially if you're wondering how to start a small business from the ground up.
You want to pour your heart and soul into your passion, and you don't want your endeavor to fail. But just because the economy isn't doing so well doesn't mean you can't start up a new business! In fact, it may just be the perfect time to do so.
Here's how to become a small business owner, no matter the economic climate:
Just because you don't have enough capital doesn't mean your dream should come to a standstill. This is still true even if you can't qualify for business loans to jumpstart your business.
Today, there are many crowdfunding options available. For example, there's Kickstarter, which is a platform specifically for funding projects and business ideas. If people are interested in your product, then they can preorder, which can give you the funding you need to form your business and scale right away.
You can even find investors on certain platforms, which means business capital is literally just a few clicks away.
Do Smart Marketing
The US Small Business Administration recommends that small businesses spend around 8% of their gross revenue on advertising and marketing. In real life, small businesses spend anywhere between 2% and up to 20% of their revenue on marketing!
Marketing is definitely crucial to the success of a business. However, many business owners don't understand smart marketing, which means a lot of their money goes to waste.
One of the first things you need to do is do a competitive analysis. Not only that, but this should be an ongoing part of your marketing plan. You need to continually tweak your marketing and services to improve upon them.
Competitive analyses can also help you find niche segments. When you can establish yourself in the market, you'll be able to set down firm roots.
To further the "niche" type of thinking, your marketing needs to get to the granular level. It's not enough to simply market to men. Think about more detailed things, such as professions, age, income, and geographic locations. Create an "ideal client" that is so detailed you can get to the root of their pain and struggle so you can speak to it in your marketing and really connect with the right people who want your products/services.
This type of granular marketing may take more work, but it'll significantly improve your return on investment because you have a clear target.
Put an Emphasis on Digital
Traditional marketing can cost a lot more than digital, plus it doesn't have as wide or effective of a reach. For instance, email marketing is very cheap to do, plus you can reach literally thousands of prospects with one email. In terms of small business economics, it doesn't get better than that.
Another cost-effective way to market your business is to do search engine optimization (SEO). Even if you hire an SEO expert to help, it won't take much of your budget. This will put your company website at the top of search engine page results (SERPs), which boosts brand awareness and fast-tracks your business.
Remember to Start Small
While you may have ambitious goals for your business, it's important to always start small. You need to learn to walk before you can run, after all. Those who try to grow too fast without laying out a solid foundation will find their success to be fleeting and unsustainable.
Focus in on a few areas and do them really well before you grow to a point that you can't sustain or spread yourself too thin!
Successful small business owners have a balance between taking caution and taking risks. Yes, you have big plans for your business, but you need to start with what's reasonable and realistic first -- without letting go of that big vision.
For example, you may have a dream of owning a large restaurant downtown. However, rent is high and you don't have much starting cash to work with.
A good way to get your dream started is to begin with a smaller restaurant outside of downtown. Then, once you've established your business and gained loyal diners that have validated your business venture, you can move your business to a larger, busier, and more convenient space in the downtown area -- and ensure success in the process because you have already spent time in the trial and error process elsewhere.
Why Starting a Business During Turbulent Economic Times Is a Good Idea
You now have some tips on starting a service business. But what if you're feeling uncertain because the economy is going through turbulent times?
Well, here's a secret: there's actually no better time to start a business!
During harder economic times, you'll likely have less competition. This is because other small business owners have started their companies during better economic times, or they're waiting for the economy to have an upward swing before they move forward.
In addition, your overhead will be smaller. Things such as equipment, materials, furniture, and even rent will be cheaper during harder economic times. This means you don't have to worry as much about overhead costs eating into your profits.
Another benefit of starting a business during turbulent economic times is if you can gain loyal customers, they'll definitely still be with you once the economy gets better. It can truly only go up from here! If you can prove your services are worth it during a recession, they'll certainly be worth it after conditions improve.
And last, but not least, this is the perfect time to jump into the market with some new ideas. During recessions, other businesses tend to cut spending on innovation, which can cause many industries to become stagnant. This is your chance to shine and make bold moves!
Know How to Become a Small Business Owner Successfully
By knowing how to become a small business owner in any economic condition, you're only setting yourself up for success.
While embarking on this journey can be incredibly intimidating (especially during difficult times), the end results will all be worth it. Be sure to use our helpful tips so your small business will make it through any hard economic times.
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