Wake Up!

Scared of starting your own business in the middle of a recession? Start dreaming and stop sleeping on the clock. Many highly successful businesses — from Microsoft to Southwest Airlines — were born in tough times. Read on to get started on the right track today, tomorrow and for the rest of your professional life.
Text by Jacquelyn Benson | July 4, 2018 | Lifestyle

While an economic downturn can make finding loans and venture capital more challenging, it also opens up opportunities in the form of less competition and readily available labor. For some, the effects of a recession — from paycuts to job insecurity or unemployment — means there’s less to lose in going into business for yourself. But entrepreneurship isn’t for the faint of heart: According to the U.S. Small Business Association, only 50% of startups survive their first five years. But those might not seem like long odds if you’ve got a real drive to succeed on your own. To make sure you end up on the right side of the statistics, start by choosing the type of startup that matches your personality, experience and current position in life.

Branching Out: The Calculated Gamble
Branching out in an industry where you already have experience and connections can increase the chances that your business will succeed. “From Day 1, you have a product, customers and vendors,” says Dr. Irma Becerra-Fernandez, Director of the Pino Global Entrepreneurship Center [PGEC]. “You have people who already know you and are loyal to you. That’s an obvious advantage.” Those considering branching out should make sure they have not signed a non-compete agreement, which could start their venture into entrepreneurship off with a big lawsuit. Becerra-Fernandez also cautions against stealing customers from your former employer. “It’s harder, but go through the effort of finding your own buyers,” she says. “You could end up burning bridges and it’s a small world out there. You don’t want to start off with a reputation for being a back-stabber!”

Franchise It: The Pragmatic Approach
Franchise owners have to follow a long list of rules and regulations, and also pay substantial fees and royalties. But according to Robert Zarco, founding partner of corporate and franchise law firm Zarco, Einhorn, Salkowski & Brito, P.A., there are substantial benefits — such as being able to use an established brand name which already has a reputation in your community and take advantage of national advertising campaigns — which can far outweigh the negatives. “The biggest mistake a prospective franchisee can make in selecting a franchised business is to make their decision based exclusively on what they foresee will make the most money,” says Zarco. “If you enjoy what you do on a daily basis, your chances of achieving personal, emotional and financial success are substantially increased.”

Digital Dreams: Tech Savvy Required
Starting an online business can be a more affordable option for those without their own financial resources or a long list of eager investors. There’s no lease to sign and no store to set up. However, there are definite challenges. “You’re competing with thousands of other sites for the same clicks,” says Susan Amat, Executive Director of The Launch Pad at the University of Miami’s Toppel Career Center. Thanks to the ease of comparing prices, successful online businesses have to find ways other than rock-bottom discounts to stand out. “It’s very hard to create a loyal online customer unless you have incredible customer service and hard-to-find products. Be able to define who your customers are and why their needs aren’t being met. Then stay in touch with them to make sure they stay happy.”

Going Solo: The Brave Loner
If you’re short on capital but high on creative talent, it may be worth going solo. “It’s easy to establish your own shingle as an independent contractor,” says Marta Alfonso, a partner at Morrison, Brown, Argiz & Farra, LLP, a nationally recognized accounting firm. “Your start-up costs are minimized, but you’ll still need to cover expenses like health care and professional liability.” But going solo can be a lonely road, with no franchise or partners to turn to for help or advice — or to share the responsibility when something goes wrong. “You’re establishing your own brand and that brand is you. Your success will rise and fall on the excellence of the services you provide, and it can be challenging to balance providing those services with all the administrative work of running a business.”

Bright Idea: Risks Included
Starting from scratch with the biggest new product since sliced bread has the potential for the most spectacular success, but it’s also one of the most challenging and risky ways to go. “If you’re the first one to come up with a new idea, you have a ‘first mover advantage’,” says PGEC’s Becerra-Fernandez. “If you start having success, a lot of wannabes will crop up, but customers will be more likely to stick with you.” But it isn’t as easy as it sounds. “Because it’s known that starting a new niche business is extremely risky, it’s very difficult to garner financial support from investors, lenders, creditors, vendors and suppliers,” says Zarco…“But it can be done,” adds Amat, “with the right team that thinks big. Look at Alberto Perlman and Zumba — it’s a dance that they have turned into a world-wide phenomenon! But it didn’t happen overnight.”