New Year is often a time for making big changes, and they don't come much bigger than throwing away the apparent security of a job and going it alone by starting your own business. But if the entrepreneurial bug has been gnawing away at you, you'll still have one big question.
The doom-mongers are promising another five years of austerity. And a quick check of the post-Christmas bank account situation will show that nobody's feeling particularly flush - indeed retailers have just reporting their sixth dismal Christmas. So does it make any sense to fire up a new venture in troubled times?
Well let's start with that job security. Two generations ago, our parents and grandparents luxuriated in 'a job for life'. That, today, is an alien concept - and it doesn't just come down to miserly businesses and pared back pensions. Most people don't want a job for life. The average job tenure is now well below two years - in some sectors (like call centres), it's as low as six months. Whilst an employer probably won't show you much oldschool loyalty, they won't expect it back from you, either.
If that gives you the confidence to take the plunge, the good news is, you will find yourself with a huge, mobile, eager and thoroughly global talent pool at your disposal. Roy Ripper is a recruitment specialist who has trained up the best in the business. He says, "In terms of talent, it's the perfect moment. The talent pool is more liquid than ever, expectations of job security are lower and mobility higher, plus other talented people may have recently lost their jobs. Those that haven't are still looking for their next opportunity to earn or buy in to something new and exciting. And as we gently exit recession, that includes people who up till now have been quietly keeping their heads down."
If you're starting on a shoestring, you won't even need to employ anyone. Freelance marketplaces like Elance and Guru, which themselves are being eclipsed by upstarts like People Per Hour and Fiverr, put a world of talent at your fingertips. Want a search engine strategy? A new website? Business card design? A social media presence? Experts are on tap, 24/7, to sort it out for you. The labour market has never been more economical or flexible.
Starting up on a shoestring
In fact, most business expenses are cheaper in a recession. If you have big capital expenses (catering equipment for restaurants is a classic example), look to bankruptcy auctions. It's sad to take advantage of other business' misfortunes, but for professional, trade-only equipment, it's not worth buying new. And for more standard stuff - computers, phones etc. - prices have never been keener. Back in 2001, a typical business-grade computer weighed in at £1000-£1200. Today, there's a world of laptops and tablets for one third of that. Indeed, all your technology will be predictably economical, thanks to the Cloud. The sort of safe file storage, collaboration tools and go-anywhere communications which used to cost £5000 upfront are now yours for under £5 per month.
Your potential customers will be looking for good deals, too; and that tends to shake things up a bit. Suddenly, procurement managers decide to have a review of their supplier lists, or open new tenders. It's a chance for you to oust bigger competitors who have got too comfortable, or too bloated to provide agile service and competitive rates.
If you need backing to get started, the traditional routes to funding aren't completely closed, despite what the media would have us believe. Mark Sisson, Managing Director at specialist credit risk analytics firm, 4most Europe says "Good ideas can still secure investment by traditional methods, either bank loan or venture capital, where the idea receives proper scrutiny and due diligence before investment funds are made available". Added to the mix are a raft of crowdfunding options like Kickstarter and Crowdcube. Luke Lang, co-founder of Crowdcube says: "Equity crowdfunding has democratised investment and brought it into the internet age. Entrepreneurs can not only raise seed capital more cheaply than taking a bank loan, but the investors also make a ready-made pool of experienced advisers and brand evangelists."
Finally, consider this. The legendary American billionaire investment guru, Warren Buffett, is credited with the delightful saying: "Only when the tide goes out do you discover who's been swimming naked." His point was, it's when times are tough that you work out which businesses are really viable, and which were treading water in the good times. It works in reverse, too: if you can start a business now, in the troughs of a recession, you'll do just fine when things start to pick up again. You'll never forget the discipline and focus required to stay on the straight and narrow in the current economic climate, and that's a fine foundation for ongoing success.