The United States economy seemingly gets worse and worse each and every day. Open up the daily newspaper and you will see bad business news all over the headlines. (In fact, your daily newspaper may be forced to close like many have around the country.)

Recession Chart - Source: Flickr

Despite all that bad news, starting a business now is actually very good timing. It may sound odd but a recession is the perfect climate to be able to get your foot in the door. Here are five reasons why a recession opens doors of opportunity for startup businesses and startup business owners:

5. Supply chains not set in stone. When everything is going well and the money is flowing in, businesses tend to stay in their same patterns. But when things get rocky, businesses will evaluate their supply chains and are much more open to the idea of trying something new.

4. Other businesses are dying off. Many businesses that aren’t built on financially stable ground will simply die during a recession. Although one business dies, that niche remains and a startup company will be able to maneuver quickly to fill the void.

3. Better employees are available. It may seem harsh but the honest truth is that when more people are out of a job, it’s easier to find quality employees. Additionally, it’s easier to not have to pay an arm and a leg for quality employees.

2. Tax breaks. With the local, state and federal government looking to create jobs, they will bend over backwards during a recession for companies that can employ. Bending over backwards can come in many forms, with tax breaks being one of the most common.

1. Everything costs less. With businesses not able to spend as much as usual, the prices of business related items will naturally decline. That means that the needed money to fund a startup is less during a recession, which is notable because funding is oftentimes one of the main stumbling blocks of a startup business.

I don’t know about you, but when I am up in the wee hours of the night, I am seeing a lot of infomercials telling people now is the best time to start a business.

I’m seeing such statements on many blogs and social media sites. But I wonder, is it really true? Or just some hype?

It’s easy to point to the latter. Times are tough and people are scared that their jobs may disappear (if they haven’t already). So having a plan B is always a good idea. But should that be starting a business?

Perhaps. If you are willing to do the work.

The many get rich with your own business ads are schemes: multi-level marketing/pyramid, or the how-tos offered often give you a taste of what you SHOULD be doing, but never the REAL secret sauce: how to make it really profitable.

Here’s why: ads and promotions like this tell you it’s easy. It’s not.

It takes a lot of hard work - probably more work than your typical job. And you MUST be willing to work long hours, including learning things like marketing, bookkeeping etc, that you may have never had to do before.

So is it possible to start a business in a recession? Sure, thousands have done it. But ask them how, and they won’t tell you it was easy.

Image credit: munny_makin, on Flickr

Well, the reports are out.

The National Small Business Association is reporting (based on its 2008 Year-End Economic Report) that things are looking pretty bleak for small business owners this year. And those surveyed are pointing to the recession as the reason why their profits and growth will be extremely limited in 2009.

And according to a recent Gallup poll, almost half of small business owners say their revenues decrease last year - and are expexting more of the same by cutting their spending this year.

So so you want to join all these small businesses?

I didn’t think so. And although you need to be realistic in what’s going on out there, I am sure businesses can thrive in a recession.

But you can’t do the same things you did before. They’re just not going to work - and could actually hurt you.

There’s plenty of evidence that businesses which market wisely, compared to those who continue with the same strategies used prior to the recession, will be the ones do well. Penn State’s research, for example, showed that firms who had a strategic marketing plan with an entrepreneurial spirit had a competitive advantage.

So stop with the doom and gloom already - and start creating a great marketing plan.

Image credit:  gothicburg, on Flickr

It’s official. We’re in a recession. But the real news is… surprise, surprise… that the US has been in a recession for nearly a year. That’s according to the National Bureau of Economic Research.

And the good news? You’ve made it this far. Sure, things might get worse, but you already have a handle on it. If you don’t, here are some suggestions:

1.  Know that there are many things you can control, despite an economic downturn. There are many things in your budget that you make a choice on every day. Make a choice that will help the bottom line long-term.
2. Allocate your resources thoughtfully.
3. Focus on current and past customers. They take less time to reeducate.

Spend more time talking to your customers and less time listening to thedoom and gloom.

People are still going to buy things no matter what the economy. It’s your job to give your customers multiple chances to choose you over someone else.

I was talking this morning to an old friend, who works mainly in real estate consulting. We were discussing the slump, and how it’s effecting most business - not just real estate.

So what’s a solo entrepreneur to do?

She’s been thinking about getting a part time job. (She actually has a couple of opportunities, both in lecturing at local colleges.)

When I started my business, I took a part-time job.  It was a great option for me: I had the flexibility to start my business and money coming in!

The key is to keep current in your field, find a job that understands you need for ’space,’ and have an exit strategy.

The latter is important. I hung on way to long at my part-time job, which became almost full-time at one point. I basically became comfortable there and forgot about my real goal. Once I realized I had made my goals with my own business, I left as soon as I could.

Let’s face it… thing’s aren’t going to be easy for small businesses in the upcoming months.

Money is tight and spending is down. So how can you survive?

Economic recessions have been a major part of US history. They hit hard and leave the unprepared in shambles. Experts say a recession is negative real economic growth for at least two successive quarters in a year.

There have been 9 recessions from 1950-2000. They consumed 94 months between 1950 and 2000, accounting for 14% of the time in those 50 years. The average recession has lasted 11 months and some have made it as long as 16 months. It’s now evident that a 10th recession is on its way.

Business owners are aware that consistent marketing year round is required for best results. However, economic slowdowns force them to do everything possible to reduce costs. They easily get intimidated by the numbers on the price tag for ongoing marketing. Marketing then comes to seen a luxury only affordable to the Fortune 500 and über-entrepreneur.

The major misconception is that marketing has to be expensive. And I’m here to tell you it doesn’t.

Marketing is possible with a tight budget - and during a recession. As a matter of fact, if you pull back your marketing efforts, chances are you won’t make it through an economic downturn to reap the benefits when people start spending more again.

If cash flow is a problem for you as the economy slows down, that’s all the more reason to spend intelligently, so that you get more bang for your buck.

From 1980 to 1985, McGraw-Hill Research analyzed 600 companies and their marketing expenditures. After 1985, McGraw-Hill concluded that those firms that had maintained (or increased) their marketing throughout the ‘81-’82 recession saw an average sales growth of 275% over the next five years. But those companies who cut their marketing saw paltry sales growth over the next fiveyears of just 19%.

So if you are convinced that marketing on a budget should be part of your survival guide, check out my other site, The Power Publicist, which offers tips and tactics to help you market yourself without over spending.

Even when the economy is going south, many people still start new businesses.

Of course, some businesses are more vulnerable to recession than others. For example, car manufacturers and auto dealers often suffer badly because buying a car is usually a longer-term decision. When times get bad, people tend to put off buying a new car as long as they can.

But there are some businesses that simply do better in a bad economy. Here are some that I thought of:

1. Pawn Shops
2. Auto Mechanics (If people aren’t buying new, they must be fixing the old one!)
3.  Credit Repair Companies
4. Collection Agencies
5. Movie rentals

What businesses do you think will do well as we face a (possible) recession?

With an ominous cloud hanging over the U.S. economy, now’s the time to take precautionary steps. Recession is something most of us have never been through, so you don’t want to be caught off-guard.

With gas prices skyrocketing we make adjustments to our commute. Maybe your walking to work, maybe buying a bus pass, regardless… your making a change Well the same goes for your small business, only it’s a little more important than transportation adaptations.

With the threat of a recession at hand, many may feel necessary to focus on cash flow rather than creating media buzz. Luckily there are certain public relations and marketing methods out there that are inexpensive and with a little knowledge can be taken advantage of during times of downturn.

PR and marketing skills are essential when running a business. Here are several free tips about what to do with your business during a recession.

• Do not stop marketing. Be smart, cut back, but remember the time you spent building up your company. If you drop your marketing efforts, you’ll have to ramp them up again!

• Continue developing your relationships with current customers. Yes, it is always nice to gain new customers, but by focusing on those who already know, like and trust you, you’re more apt to continue to profit. And remember, it costs less to target your current clients, than trying to get new ones.

• Pay close attention to consumers and their actions. By keeping an eye on new trends in your target markets, you can outsmart your competitors and make changes in products and prices.

• Locate and invest in market segments that are continuing to grow during a recession. You want to win these markets whether you are already selling to those markets or if they are new market segments.

While many large companies got rid of 50,000 employees, small business owners added more than 20,000 jobs in August. That’s according to the ADP National Employment Report.

For companies with fewer than 50 employees, the figures looked like this:

• Total small business employment: +20,000
• Goods-producing sector: -16,000 small business jobs
• Service-providing sector: +36,000 small business jobs

Still, I wonder, how are you feeling as a small business owner?  Are things really tight for you?  Or do you find this economic downturn a boost for your business?

Last week, I posted on my other blog, the importance of using PR during an economic downturn.

Why is public relations one of the strategies you should keep doing, regardless of your budget and cutbacks?

1. Credibility. People are scrutinizing their purchasing decisions, watching every penny. So they often turn to credible sources of information to help make that decision. These sources include friends, family and traditional media, which PR reaches.
2. You can do more with less.  Public relations costs less than many advertising and marketing techniques. And it allows you to reach target markets with a variety of mediums: from face-to-face meetings to news releases; media interviews and commentaries; from special events to newsletters and blogs: the possibilities are vast (and cheap!).
3. Publicists are valuable to journalists, especially during a recession. The media are also feeling the economic pinch (for a variety of reasons), which means staff are being cut. As a result, editors are relying more and more on PR pros for story ideas.