Virtualinfocom's Blog

Opportunities abount for Startup’s

Consider this: American legends Walt Disney and Bill Gates launched two of the country’s most successful businesses to date during “down” economies, and 16 of the 30 blue-chip companies that comprise the Dow Jones Industrial Average were started during such times. So, even if the economy is at the bottom of a down cycle, is that so bad for startups?

Not necessarily. Forward thinking entrepreneurs are able to capitalize on uncertain economic landscapes, or even on “down” markets, for a handful of reasons. First, in an uncertain economy, individuals and businesses begin to migrate from those expensive, faceless brands dominating the upper stratospheres of the business world to those businesses–often startups–that are able to offer personalized service with upper management oversight at more cost effective rates. This paradigm shift begins to create additional new business opportunities
for startups, especially for those that possess an intimate understanding of a particular industry.

It is highly unfortunate when skilled workers, such as those from the former leading financial services firm Bear Steams, are left jobless due to economic conditions.
But, while this news rings poorly for the individual and the overall economy, these layoffs (typically from large corporations) mass to form a large pool of qualified workers now available to the startup business owner. Also, it is often during these times that former Big Business
executives may choose to parlay their years of corporate experience into their own entrepreneurial endeavors, flushing the market with new creativity and business ideas.

When companies face tighter budgetary constraints, they tend to outsource jobs and projects with more frequency, creating tremendous new business opportunities for startups.

One of the most important and costly expenditures for a business is real estate; so, when rapidly expanding businesses like Starbucks begin to scale back operations, or companies like Linens ‘n Things go out of business completely, startups benefit. The influx of retail and office space to the market creates reduced rents and more valuable concessions from landlords who need to remain flexible in order to fill empty space. As vacancies rise, rental rates typically fall, and this is good news for startups that may have been priced out of some real estate markets.

According to The Index of Small Business Optimism, measured monthly by the National Federation of Independent Business (NFIB), small businesses remained cautiously optimistic in early 2001 when economists were predicting a worsening economy. That’s because savvy entrepreneurs knew then what they know now: there are opportunities in an uncertain economy to create the foundation for a largely successful business. And this is good news for the economy, too, which often relies on startup businesses for growth and jobs. In fact, according to The Small Business Administration, small businesses created more than 11 million jobs in the United States between 1992 and 1996.

So, while our economic outlook remains uncertain, I believe today’s entrepreneurs should consider jumping into the marketplace. Companies like Hewlett Packard, founded in the midst of the Great Depression, have done exceptionally by remembering that economies, after all, are cyclical.


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