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The Accidental Entrepreneur: 6 tips for starting a business in the middle of a recession

By Robyn A. Friedman 

 

Elizabeth Salem always wanted to be an entrepreneur, so in March she took the leap and opened A Sweet to Eat, a startingbusinessJacksonville-based bakery and catering company. Although some people might question her decision to open in the middle of one of the worst recessions in history, Salem disagrees.

Elizabeth Salem

Elizabeth Salem

“Contrary to popular belief, this is a good time to open a business,” she said. “People are staying home, and they want small pleasures. They’re getting back to being with family, and part of that is eating good food and good sweets.”

Salem is not the only one starting a new business now. Experts say the recession is boosting entrepreneurial spirit and activity. Some people are launching new businesses out of necessity after losing their jobs. Others are relying on severance packages to bankroll their business dreams. There are also savvy entrepreneurs who realize that the recession—and resulting business closings—are creating niches they hope to fill.

A recent survey by Findlaw.com reveals that 61 percent of Americans have either started or thought about starting a small business. And one in four workers (25%) who have not found jobs are considering starting their own business, according to a CareerBuilder survey released in April.

Local groups that support entrepreneurs saw a spike in interest as the recession worsened. The Small Business Development Center (SBDC) at the University of North Florida, for example, conducted 26 start-up workshops in the

Janice Donaldson

Janice Donaldson

first quarter of 2009, with 509 attendees. During the first quarter of 2008, the SBDC ran more events—35—but had only 361 attendees.

“The economy is a catalyst right now because it’s forced some people to make the leap,” said Janice Donaldson, regional director of the SBDC in Jacksonville. “The reason a person is an entrepreneur is because they have a willingness to take a risk.”

Even though experts agree that now is a good time to start a business, they also advise entrepreneurs to get back to basics and stick to the fundamentals of good business planning; after all, the margins for error are slimmer in a recession. Here are some tips for would-be entrepreneurs:

• Write a business plan. This should be one of the first steps any entrepreneur takes, but many businesses don’t have one. “A business plan is a road map for your business,” said Salem. “You may add or take away from that map, just like you turn left or right, but it’s still going to lead you where you need to be eventually.”

• Make sure you are properly capitalized. Financing is a stumbling block now, said Bob Adasiak, chairperson of the

Bob Adasiak

Bob Adasiak

 Jacksonville chapter of SCORE, an organization of retired business people who voluntarily mentor others. “For start-ups, it’s almost impossible even with good credit,” he added. The recently-enacted American Recovery and Reinvestment Act of 2009 should help ease access to credit by small businesses but its effects will probably not be felt until at least the second quarter of this year. Pursuant to the Act, the Small Business Administration (SBA) has eliminated certain loan fees and raised guarantees on some 7(a) loans in the hope of getting the lending markets flowing again. That should help people like Salem, who would have liked to base her operations in a freestanding building but instead had to settle for renting a commercial kitchen. 

• Stick to an industry you know. Having experience in an industry can give you a leg up. That way, you don’t have to learn the basics of the industry but can hit the ground running.

• Follow your passion. “You have to love your business,” said Sandy Bartow, vice president of
Sandy Bartow

Sandy Bartow

small business for the Jacksonville Regional Chamber of Commerce. “You don’t have to love your product or service, but you have to see a need in the marketplace, have a feasible business model and be determined to succeed.”

• Don’t be afraid to get help. There are many local providers of free or low-cost advice, referral

Jackie Perry

Jackie Perry

and counseling. “No matter what level or stage your business is, if you have an idea or are looking to grow to the next level, consider the business support, tools and resources that are out there for you,” said Jackie Perry, executive director of the Beaver Street Enterprise Center, a business incubator in Jacksonville. “You don’t have to do it alone.”

After losing her job in October 2008 and looking, unsuccessfully, for a new one, Jeanne Maron launched a new business—The Gifted Cork, a wine and gift shop in St. Augustine—in February. “Even in a recession, people are still drinking wine,” she said. “And by starting in a recession, I’m already at the bottom–I don’t have to climb out of anything. Things can only go up.”

Elizabeth Salem agrees. But she cautions prospective entrepreneurs to do their research and make sure they are willing to put in the hard work necessary–particularly in a recession. “Gather as much information as you can, and don’t be deterred by the small details,” she said. “Take a look at yourself, and ask yourself the hard questions. Starting a business is not for the faint of heart.”

Robyn a. Friedman is a contributing editor to the Jacksonville Advantage. She can be reached at RAFWriter@att.net.

 

Wilfredo J. Gonzalez

Wilfredo J. Gonzalez

• Be creative. Look for opportunities in places you may not ordinarily consider. For example, the vast number of foreclosures occurring now is creating a need for businesses to clean up and maintain those properties. “For people who are innovative, the recession helps because they can come up with new ideas,” said Wilfredo J. Gonzalez, district director of the SBA’s North Florida District Office. “Maybe they lost their job or their salary was diminished, so the recession is causing them to bring their ideas to fruition.”


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