Ask any business owner how much it costs them to get up and running. The answer will most likely be “Not a lot!” Most small business owners have spent their first years running their businesses out of their home – at least initially. Even if they have only been open for a few months, they are still making money!
There are several factors that affect the startup costs of new businesses. The most obvious is the cost of equipment. New businesses have to purchase their equipment. While this can be a huge expense in the beginning, the cost of equipment is usually reduced when the economy recovers and there are fewer economic restraints. If you already have some inventory, it is even more likely that you will be able to sell some or all of it at a discount once your business is up and running. Even a small increase in demand for auto repair services means that you can pass on very substantial savings to your customers.
A second hidden expense that many small businesses face is labor. The number of unemployed or under-employed people is probably even higher now than it was during the recession because so many people have been laid off or downsized. The number of people with valid reasons for not being in the workforce (such as being separated from the work force) is also much higher right now than it was in previous recessions. This means that when you hire a new employee, you have to pay for two employees instead of one.
The recession has had a larger effect on online businesses, which are virtually unaffected by the state of the economy. Many businesses now need to expand to accommodate the growing number of visitors that come to their website. This can mean increased advertising expenses for web site development. While there may be fewer advertising dollars available, there are still fewer overhead costs associated with maintaining an online presence. That means fewer opportunities for layoff or temporary employees.
In spite of the loss of retail sales and other sectors of the small business industry, there is one area that seems to be thriving during the recession – online business opportunities. One of the reasons that online business opportunities have remained so popular during a recession is the tremendous freedom they present. While you are able to run your business in any way that works for you during a recession, you can also choose to take a different approach if the market conditions are more conducive. For example, you may decide to offer your services on a freelance basis rather than hiring employees. Both options can help you to tap into a new source of income without having to spend money on employees.
Another small business opportunity that many people are turning to during a recession is working from home. Home-based business offers a number of advantages, including the possibility to build a self-reliant financial base and avoid losing your job during the recession. There are also great tax benefits available to those who elect to work from home. If you are planning to start a home based business, you will want to take a look at the opportunities available to you through the Small Business Administration.
Even though there are many people lose their jobs in a typical recession, the number of individuals who are starting up new businesses is increasing. As an example, people are opting to purchase a home computer rather than using the stand-alone desktop computer that they currently own. Additionally, many people lose their jobs in the manufacturing sector but decide to start an automotive repair shop instead of turning that job down. These new business owners have the opportunity to tap into new business opportunities during a recession through the small business administration.
Another small business that is growing rapidly in a recession is the travel industry. It is no secret that most people hate flying during a recession. For this reason, the travel industry has emerged as one of the fastest growing businesses in the small businesses industry during a recession. If you travel often, you may want to check into the opportunity that exists with the government and private sectors to provide cheap tickets for traveling companies to fly employees to their destination.