10 Tips for Starting a Business in a Down Economy

Starting a business in a down economy can be a smart move: Prices for goods, services and labor are down while supply is up. The lag in consumer purchasing also gives the new business owner time to work out all the kinks and hone his or her sales pitch. That said, times are still tough, so here are 10 tips to help you start your business in a down economy.

1. Buy used equipment. The market is flooded with used furniture and office equipment as businesses shut their doors. Look for closing announcements in your local business news and then contact the operations/engineering department for a deal. Craigslist and eBay are also good places to find used office equipment.
2. Use your membership discounts. As a member of NFIB, you can save up to 68% on office supplies. Other associations that you belong to may offer similar discounts to help get you started. Do your research before you buy.
3. Dial HR. Local companies with recent layoffs can help identify available talent. Contact their human resources departments to see if they have recommendations to help you start staffing.
4. Barter for goods and services. Companies such as BizXchange provide a network for business bartering.
5. Start it on the side. Keep your current job, if possible, or continue your job search while building your new business. If the new business takes off, turn your focus solely to it; if not, you'll have something on which to fall back. Consider these 9 tips on starting a business while you're still employed.
6. Together is equal. If you're venturing out on your own, separate your new business from all your other businesses and respective business partners. Without that legal separation, the failure or success of your new business will be owned, in part, by your other businesses.
7. Offer discounts to a small number of customers who pay up front to increase cash flow.
8. Offer flexible terms. Struggling businesses may switch vendors if you are willing and more able to work with them.
9. Take advantage of slow times. Work out all the kinks and pitch your business to anyone and everyone you meet. When the market picks up, you'll be ready to soar.
10. Customer service. A no-cost frill that is worth cash to your customer.

Starting a business in a down economy can be risky, but the rewards can be many. For best results, think creatively and work strategically. Then let us know how these, and other tips, helped your business succeed in a rough economy.

Helping you further: 7 business-building basics for first-time business owners

1. Build your business around your knowledge or passions -- those things will get you through the tough times.
2. Fill an existing need in the market.
3. Get a mentor.
4. Put together a long-term business plan.
5. Get the financing. NFIB and the Small Business Administration show you how.
6. Structure your business correctly; NFIB helps you figure it out.
7. Signed, sealed and delivered. When still small, it is tempting to seal deals with a handshake -- bad idea. As the business grows, it can take more than a handshake to get out of those deals.

Photo credit: jmarty