ZIMBABWEANS at home or in the Diaspora starting a business at any time is daunting, but starting a business in difficult economic times may seem a huge challenge.
Consumers are weary and overly sceptical, which tends to restrict business growth. These are difficult economic times, but would you rather spend your precious time whinging about geo-political and macro-economic trends beyond your control or should you maybe focus on those things in your locus of control?
Whether you are afraid of losing your current job, unemployed, underemployed, at some point in your life you probably thought about starting your own business. When economic times are difficult many traditionally safe jobs, even those we used to consider jobs for life have become uncertain.
All entrepreneurs face the same fears on the road to building any enterprise. Many people are fearful of starting a business during a downturn as times are tough, and people are curbing their spending. The reality is that a number of large corporations today were founded during a period of economic uncertainty. A business launched during a difficult time is sufficiently lean and well-positioned to succeed when the clouds clears. When you start during bad times you take nothing for granted.
The right time to start a business is when you have a great idea with a product or service that address specific needs whatever the environment. Even during these tough economic times, there are great business opportunities for those who are willing to take the risk, beat the odds and succeed.
The first step to getting it right when setting up your business is in the planning stage. Creating a successful business in a difficult economy requires minimising the running costs and to work as efficiently as possible. Keeping costs under control in the early stages of running your own business can turn out to be a useful skill when your business grows up.
However, for many families and individuals affected by the recession, finding more ways to make a living or supplement income streams is a crucial need right now. Even home-based businesses can be a good way to start during a downturn because of little to no overhead costs. The question is always what can I start during this downturn?
Food is one business that remains strong during a recession. There are opportunities in environment-friendly green practices or organic products. People still need to eat and drink no matter how bad the economy. People still line up in groceries to get their fresh supplies and bread. Brides still need their wedding cakes, and so do children celebrating birthdays. Demand for cosmetics is there in good times or bad times. Even hairdressing services are still required in tough economic times.
People tend to forego buying new cars when money becomes hard to come by and cheap credit is not as easy to get. Instead, they’re more likely to keep their cars, which entail spending money on car maintenance.
An auto repair business has a lot of opportunities in a recession. Consumers tend to hang onto things longer rather than just buying new ones when they perceive the economy is headed downhill. People are buying fewer new vehicles; implying people are either buying used vehicles or hanging on to their current vehicles. Older vehicles need maintenance and repairs. Whether the economy is going up or down, we are all going to go old.
A good number of even our country folks all over the world may go back home and may require specific niche services for the savvy entrepreneur. Rain or sun shine, good times or bad, there is a certain percentage of the population that will pay for garden services.
Credit burdened families may be looking to cut down their entertainment expenses and looking for inexpensive things they can do with their kids. Watching videos on the internet have become much more commonplace as budgets shrink. Online videos are an excellent source of entertainment for the family. You may have a valuable service but do the prospects know about it? If they do not they’ll find your competitor. That’s why it’s absolutely critical that you employ effective Search Engine Optimization (SEO) methods.
The call centre industry is growing even here is South Africa as businesses reduce their costs and outsource some basic functions. I was at one of these centres recently servicing the UK market from here. For a person in the UK would not be able their calls are being answered in South Africa as most of the operators had very good British accents.
In a downturn more and more people are looking to sell some of their unused and unwanted items at home to get some extra cash to pay bills presenting further opportunities in this space. It is significantly riskier to start an unproven business from scratch as compared to starting a well-known franchise.
Education and learning are high on the priorities of parents world-wide. Regardless of their financial situation, parents want their children to learn and succeed in school and are willing to pay these costs. Services in the education sector will always find consumers.
Every business should always track their return on investment (ROI) when marketing and a tough economy reinforces this. You can track response rates several ways from emails or online advertisements, check the site of origination or the links customers are clicking that led to a sale. Closely tracking marketing efforts allows businesses to repeat what is working and eliminate what is not.
Focusing on existing customers during a tough economy can help encourage repeat business, thereby boosting sales. Even during tough times, people will pay a premium for services that cater to them individually. Review the demographics of existing customers to determine the characteristics they share and leverage this information to attract new customers. If your customers are happy with you, ask if they can be a referral for you. Most customers will completely understand and be more than happy to help provide positive feedback. Quality should always be a priority but when times are tough it should be one of the most important reasons for being in business.
E-Mail marketing, text message marketing, online advertisements are all some of the most affordable marketing tactics available. You can use these tactics with both new customers and current customers in order to keep them engaged and active. Social media advertising provide a huge platform and a huge audience through which a business can be promoted. Savvy eentrepreneurs are actually using the economic turmoil to refocus their efforts, “bullet proof” their enterprises and shift their businesses into long term growth mode. When economies start to grow faster again they will sprint right ahead.
Tafirenyika L. Makunike is the chairman and founder of Nepachem cc (www.nepachem.co.za), an enterprise development and consulting company. He writes in his personal capacity