When a recession hits, it's a good idea to start thinking about another revenue stream for your family. Starting a home business can be a way to soften the blow if you work for a company that might be downsizing soon. Not only is it a way to generate more money for your household, it can also lead to more satisfaction with the work you're doing (and help you grow closer as a family). Before you quit your job, however, there are some things you should consider about going into business during a recession.
Providing Something People Need
Before you launch a home business, you need to consider it carefully. Is the service that you are providing something that people truly need, even in a recession? If your idea for a home business involves something that people spend money on frivolously, it's not a good idea. People aren't likely to buy designer purses or expensive custom-made jewelry in a recession. Research the type of business that you want to start, and see whether similar companies have prospered (or at least survived) during past recessions.
Assessing the Competition
Before spending a dime on a home business, you should find out how much local competition there is. Check the yellow pages and search online. If your local community has 50 dog-grooming businesses, chances are that many of them will be out of business before a recession ends. If there are only a few competitors in your niche, there's room for growth.
Marketing Your Business
You probably won't have a big marketing budget for a home business. You need to find low-cost marketing strategies, especially during a recession. Word of mouth is a tried-and-true method for generating customers. Pitch your services to everyone you know, and ask them to refer people to you as well. Spending a lot of money to market a startup business can be disastrous. It takes a lot of new sales to make up for the expense, and the lack of response to your initial efforts can be not only discouraging but also financially devastating.
Devoting Time to Your Business
You really have three options when it comes to the amount of time you'll spend on a work from home business:
- You can work full time at another job and devote your free time to the business.
- You can take a part time job for steady income while you get the business up and running.
- You can work full time at the home business.
There's no right answer to this question, but you need to consider all three options before you get going. Can you handle the extra work load on top of a full time job? Do you need part time income to supplement your household? Are your services in enough demand that you can quit your day job and focus on the business?
There are many great advantages to starting a home business, even during a recession. Consider the questions and tips above and do a lot research before making your decision. This will you help you figure out if a home business is right for you.
Daphne Mallory, Esq. is the co-owner of Mallory Writing Services and has written more than 100 articles helping home based business owners and entrepreneurs start and market their business. You can learn more about her here.