Tough economy? Start a new businesss
It may sound crazy, but one entrepreneurial experts thinks a recession is a great time to launch a new business.
“The one predictable way to achieving financial success is to own a business,” claims
Bill Bartmann , the author of
"Billionaire Secrets to Success.” “The current economic landscape is a most opportune time to start a new business. It is all about applying basic common sense.”
Is this man just a nutcase or does he know of what he speaks?
Bartmann actually saw the company he started in 1986,
Commercial Financial Services, take off during the recession of the early 1990s. The now defunct debt-collection company grew to a $3.5 billion company with 3,900 employees.
Now I know what you guys are thinking: "What if I take this billionaire’s advice and fail?"
Bartmann went through a major failure of his own. In 1998, the Commercial Financial crashed and burned after a former business partner committed fraud. Bartmann ended up indicted on 57 counts but was eventually acquitted.
"During the four-year criminal investigation and subsequent 89-day trial, all of our personal financial assets were frozen by the federal government," Bartmann explains. "Our inability to use our own funds to defend the civil litigation while the criminal charges were pending resulted in the filing of personal bankruptcy."
Eventually, a Federal jury acquitted him of all charges.
The company was eventually liquidated, but he looks at the failure as a lesson.
"My wife and I paid a $3.5 billion tuition for the education. That tuition is way too steep for only two people to get the benefit of the education. As a result we now share the lessons learned in growing a billion dollar company from a kitchen table with a $13,000 start-up loan, as well as those learned in dealing with a personal and business catastrophe of this magnitude."
Here are his tips from the trenches on starting a new venture, or boosting profits at your existing company during bad economic times:
Consider a home office or a virtual office – Who said you can’t start a business right out of your own backyard? There is no reason to purchase property. And if your furniture, fixtures and equipment doesn’t directly produce revenue, postpone purchasing it. And if you can’t postpone it, lease or rent it. Don't buy it!
Take advantage of great opportunities – Now’s the time to obtain cheap credit, as rates drop. You can also get great bargains on equipment and grab market share from weakened competition.
Cut operating costs - Contract services. Everything from your payroll and your book-keeping, to your personnel can come from third-party companies.
Hire temps rather than full-time workers - Every announced “lay-off” should be viewed as an opportunity. Great way to obtain “top notch” employees looking for work.
Beef up marketing - Narrow your target customer (i.e. those who still have money to spend) and then produce products or services to target these new customers…then market directly to them.
– Keep tighter control over merchandise. Order only what is moving and order in small volume.
– Instead offer discounts for cash. If they cannot pay you now, they definitely won’t be able to pay you when times get tougher.
Expand your financing capacity and draw it down now – If you have a lending relationship, increase it. If you don’t have one, then get one.
– Yes, you get less money, but during a recession cash flow is more important than "profits."
