Given that we are in the middle of a recession, if you were to start a business, what would it be? Where do see the opportunity?
That’s a very interesting question to ponder, especially for entrepreneurs willing to capitalize on opportunities available.
I’ve seen a number of responses, blog posts, opinions on the types of businesses that could work in difficult times. Some of these include:
- Provision of Financial advice. In times of confusion and fear — shrinking retirement funds, increasing debt, downhill investments, etc — there’s a huge number of people who need guidance on the steps they need to take. Small business owners are looking for advice on how to deal with unexpected financial constraints. Families and individuals may be looking for advice on how to manage their finances given their new budget reality. Investors, particularly retirees, need help in protecting their nest eggs and finding any opportunities in a down market.
- Eldercare. One reality we all face is that whether the economy is going up or down, we are all going to go old. Services such as adult daycare facilities are still going to be needed. However, if you are targeting the baby boomers market, most of which relies only their retirement funds (that may be shrinking) as their main source of income, this may be the group that will be tightening their belts even more. So niche travel for the active boomers may be hard hit during tough economic times.
- Auto Repair and Maintenance. People tend to forego buying new cars when money becomes hard to come by and cheap credit is not as easy to get. Instead, they’re more likely to keep their cars, which entails maintenance. As such, there is a big opportunity for this business when the market goes down.
Let me know if you have any other ideas of the types of businesses that could work during a recession. Love to hear your thoughts!
[Powerhomebiz]
Tax Tip 1. Your business expenses are deductible even if you paid them from your non-business bank account, personal credit card, or cash. Take a few minutes and go through all of your expenses for the year. If the expenses were for your business, deduct them. (Does not apply to corporations).
Tax Tip #2. Be careful when labeling expenses “entertainment.” Business expenses such as advertising and promotion are 100% deductible, but entertainment is only 50% deductible. Don’t call an expense “entertainment” unless it really is.
Tax Tip #3. Hire your kids and save a bundle in taxes. You can pay your children under the age of 18 as much as $5,700 a year, write off the wages as a 100% tax deductible payroll expense, and the children owe no federal income or Social Security tax on the income earned.
Tax Tip #4. You cannot deduct charitable donations as a business deduction (unless you are a corporation). If, however, you purchase an advertisement in a charitable organization’s directory or event program, the cost of the ad is fully deductible.
Tax Tip #5. Manufacturers, and some construction, engineering, and architecture firms, software developers, and video producers, are eligible for a 6% “manufacturer’s deduction” for income earned from domestic production. This “bonus” deduction is in addition to the deductions already allowed for manufacturing expenses.
Tax Tip #6. You can go back to school, to take courses that further your education in your current business or that help you operate your business, such as bookkeeping and computer skills, and get a business tax deduction for the cost of tuition, books, fees, and even travel.
Tax Tip #7. Clothing you wear to work is not usually deductible unless the clothing is a uniform or otherwise not suitable for street wear. But if you buy shirts, jackets, hats or other clothing with you business name or logo, the cost is fully deductible.
Tax Tip #8. In most cases, the cost of your inventory (goods for sale) cannot be written off until sold. But if you have damaged inventory, inventory that is out of date or out of fashion or otherwise unsalable, you can write off the cost of that inventory immediately.
During this time of economic recession, what is your sales strategy?
When times are tough, customers typically reduce spending. They cut back on their purchases, hold off buying, decrease their budgets, even look for alternative (cheaper) suppliers. And all these can wreak havoc on your business, as well.
Brent Holloway, co-author of the book Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology, recommends that now is the time to pump up your Sales 2.0 strategies. These covers the use of innovative sales strategies focusing on improving process and customer engagement, such as:
- Selling more through video or web conferencing, saving on travel costs and increase selling time.
- Consider products and services, especially those of relatively small to average value, that can be sold profitably with a remote or low-touch sales model.
- Accurately capture key market information and metrics such as average sales cycle, average deal size and sales-cycle conversion rates. The information can help shape your sales strategy and better direct your resources
- Experiment and test: test a new sales message, pricing options, new technology, or even a new sales process
Tom Hopkins, in an article in Success Magazine , offers the following advice:
- Get out of the “woe is me attitude” and instead focus on what’s right with the world and your industry to come up with creative ideas for how you will continue to win business.
- Sit down and analyze what you’re doing differently today from when you were at your peak performance.
- Contact your best accounts weekly during tough times to let them know you care.
- Take a lesson from the Energizer Bunny and just keep on going.
[Powerhomebiz]
