I am hearing more hesitancy in the voices of aspiring entrepreneurs over the past few weeks. They are ignoring their research and, instead, starting to buy into the negativity in the media about the economy. They see opportunity, but more of them seem to be afraid to pull the trigger.
In an essay at Wired, Daniel Roth makes this observation:
With the world's economies apparently snowballing into a deep recession, it feels uncomfortably Pollyannish to see signs of hope. But for the bravest inventors and entrepreneurs, conditions are ideal to pounce on a business opportunity. In periods of economic turmoil, people are hungry and work cheap, and entrenched companies often concentrate on in-house cost-cutting instead of exploring new markets, which can explode with the next turn of the business cycle.
Tom Kruczek, Executive Director of the Center for Entrepreneurship at the Crummer Graduate School of Business at Rollins College, offers this observation at his blog site:
As we watch the news or read the newspaper, we see examples of large corporation cutting back on everything from staffing, to marketing to R & D, which opens up opportunities for the entrepreneurial company. Now is truly a great time to launch a business.
There are many new opportunities out there. Don't believe only the bad news you keep hearing about the business climate. Because for those willing to take the plunge, there are fewer competitors in the market and the cost of doing business is going down.
Now is, indeed, a good time to start a business.
I have to admit that I am starting to buy in to the negativity too.
I am losing all confidence that our government has the ability to do anything right, and worried that they are just making everything worse with their panicked, day-to-day, multi-hundred-billion dollar money wasting.
Until this week, one of the ways that our company was going to grow profits next year was through the part of our business that imports products. But when the Fed cut the interest rate to zero, the dollar had a record decline against the Euro in a single day. I was lucky that I had just paid a supplier in Europe a few days earlier, because it would have cost me about $10K more if I had waited until this week to pay.
It's difficult to plan anything, when you don't know what the government might do next to throw your plans into disarray. Especially when that's combined with the crazy pricing swings of commodities.
I am growing increasingly concerned that our government has no understanding of what's really going on, and will continue to take more and more expensive steps that will just make things worse, and cost us all trillions of dollars in taxes in the future.
Without a doubt, 'government' is making it worse! On the other hand, I am really not concerned with what 'they' do... I'm concerned with the good that I can do.
During the Great Depression, many firms that were 'household names' pulled back their advertising and marketing budgets for fear of what 'the government' was or wasn't doing to solve the world's problems.
They have all faded from sight.
Other firms jumped on the opportunity the economic 'downturn' presented and now THEY are the household names...
My favorite was a relative 'unknown' by the name of Proctor & Gamble...
They poured every dollar they could into advertising in SPITE of the bad economy.
They advertised on a 'new and upcoming' medium -- radio.
Each time they got some extra cash, they chose another soap product to sponsor another radio drama (we call them SOAP OPERAS today). By the end of the 'depression' they were the king of the hill...
(And, oh, by the way, P&G's advertising dollars propelled a relatively new advertising medium -- radio -- into the forefront AND created an American tradition -- the soap opera, too.)
So, to hell with the greedy bums in Washington. The entrepreneurial spirit is alive and well.
I'm banking on the fact that consumers still need to buy (and need to know where to get the best deals) and small businesses still need to advertise to tell those consumers about the good deals they offer... I'm also banking on the fact that localized web searching (discount tires, Smalltown, USA) in a relatively new marketing medium will offer a win, win, win situation for the buyer, the seller and me.
God Bless The USA!
Have a Happy and Profitable 2009!