Starting a business in a recession – pros and cons

Reasons not to start in a recession
1. People are spending less money
2. It will be harder to raise money
3. It feels risky at a time when everyone is scared of risk

Reasons not to start in a recession
1. It is cheaper to start now than at any other time
2. So it needs less cash to start than at any other time
3. Your opportunity cost is small
4. People and businesses still consider some new options
5. Creative non-cash deals easier to do e.g. partnerships
6. Easier to hire great staff/consultants
7. Your positive energy amid a sea of depression will stand out
8. Cheap acquisitions
Technology has advanced to such a stage, it’s now possible to start a global business from a laptop, forcing the entrepreneurial doors wide open to everyone from teenagers to the retired and those who quite sensibly want to dip their toes in the water (or at least on eBay) before taking the plunge. There’s also a greater range of fi nance available to help make your entrepreneurial dreams a reality than ever before. Even though some of the key sources of fi nance, such as banks and equity investors (which take a stake in your company in exchange for fi nance) have been badly hit by the credit crunch, and are investing less in new businesses, money is still available. So if your idea is good enough – and presented in the right way – people will want to invest in you. (For a detailed discussion of fi nance options, see Chapter 4). What’s more, if you can gain investment in tougher economic times, it’s tantamount to a rubber stamp of success. There has also never been so much help and information for people
who are thinking about striking out on their own, and the government has never been so geared to encourage enterprise. The National Enterprise Academy, which will open its doors in September 2009, will deliver the UK’s fi rst full-time accredited courses in Enterprise and Entrepreneurship. It is the brainchild of Dragon’s Den entrepreneur Peter Jones and its aim is to give students – aged from 16 to 18 – the skills, experience and support to learn how to set up and run successful and innovative businesses, or to become enterprising employees, helping to grow existing businesses – skills that can be used across any business sector, and skills for life.

Prime-time television shows such as Dragon’s Den, The Apprentice, Tycoon and Risking It All have pushed the idea of running your own business to the forefront of the national psyche – no longer is it exclusive to the daring or the pinstriped, it’s for everyone. Of course, startups.co.uk has been championing business pioneers and helping those inspired to follow in their footsteps for some time now, through its website, awards and other events. As such, startups.co.uk has been more aware than many of the rise in interest in entrepreneurialism. But even we were surprised when our fi rst book How They Started, telling the startup stories behind some of the UK’s best-loved brands, from Innocent Drinks to Pizza Express, hit Amazon’s Top 20 on its release in 2007, and garnered considerable media coverage. Such is the current buzz around business. The startups.co.uk website has become a font of knowledge and debate on starting your own business, and Start Your Own Business 2010 draws all this vital information together in a defi nitive guide to starting your own company. The book is presented in the readable, sharp, jargon-free style that characterises startups.co.uk, with key tips, action points and engaging case studies to help you on your way. Whether you have designs on becoming the next Richard Branson or simply want to go it alone and be your own boss, you have come to the right place. The following pages will guide you through choosing the right business to run and deciding whether you are up to the job of launching your own company, to drawing up your business plan and everything else involved in preparing you for take off.
So fasten your seatbelt and get ready for the ride of your life…