Don’t panic, start a new business

September 17th, 2008

Think of the recent volatility in the markets as an opportunity.

When the economy shrinks it’s really only resetting itself, getting rid of excess capacity. Because eventually the market will be up again. And while credit may be hard to get right now, there’s capital still sitting around wanting to be used: your labor is capital.

This is the perfect time to start a new business. You’ll have to be thrifty and thoughtful, but that makes good business sense even in a growth market. Scrape together some money with your friends and come up with a business plan to solve a problem. Trust me, when people are back to spending money again you’ll be well-positioned to make some real dough. Here in America, we may not have a physical frontier anymore where people can just pack up and get away from their past and start a new life, but being an entrepreneur is the next best thing: you can pack up and leave your past career and be in total control of your own destiny.

Hell, even buying a franchise is a good idea. Then you can buy a business model that’s already been worked out and get started now so that when people are no longer spooked by thoughts of a recession, you’ll be ready. I work for a franchising company that was started in the recession of 1990-91. The founders managed to build a successful, stable company – and people are still buying franchises.

Yet another option is going to work for a startup. New companies are starting all the time and they need good, cheap help. By going with a company at the beginning, you’ll be well positioned to get a payoff if you help make a successful company.

Keep in mind that recessions happen because people think there’s a recession. It’s all in your head.

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