New York, 26th July 2008
In difficult economic times it is often not easy to raise funding for a new business.
If you are looking to start a business for which large investments are necessary – like needing to purchase large machines or buying in a lot of stock, it will most often prove very difficult to get a bank loan or find equity.
So in a downturn, it is advisable to look at starting service oriented companies instead, which you can most likely build based on your own cashflow and a minimal investment which allows you to buy the computers you may need or a company car. Often friends and family are the only investors you may need.
In particular in the IT and New Media industries, you can build a company based on knowledge and expertise. Even more so if you have experience that is relatively rare. In those cases you can generate a reasonable revenue within a short period of time. The hardest thing in this scenario though is that whilst you will have to work for one client, you also have to be looking actively to find your next client and project. This is often overlooked, in particular by technical people who tend to much rather focus on the problem or project that needs solving. However, using viral marketing it is very easy to bring your services to the attention of those potential clients without incurring heavy costs for PR and advertising. Most of all, it is important to invest (time) in the building of a network and to learn to use tools that are available, such as Plaxo or Facebook, or even more specifically when it comes to B-2-B ofcourse, the E.Factor.
The use of a good CRM will also help you structure your contacts, allowing you to tap into your own database when you need to – an affordable and great example of these is Sugar.
When you are looking for the next business idea – it is sometimes worth looking at very old businesses that have been around for as long as you can imagine. Sometimes you see innovation that is truly astounding and something you would never have thought of – take for instance Slate NYC (slatenyc.com) A fresh look at Laundry. Eco-friendly, customer oriented, and quite amazing in its realization. But there are many more examples to find, take for instance the travel industry – a difficult one to innovate but there are still new companies that come up with new niche areas or look at accounting firms – who now build an entire online system for small companies. It is also worth looking at new possibilities and markets – such as sustainability, child care, leisure industry etc. When it comes to the service industries – you can do a lot with an investment of creativity, knowledge and hard work. Stir in a good dose of viral marketing and some tools as mentioned above, and you have all the ingredients to earn a decent living as an entrepreneur.