We are at that time of the year when everything’s about new goals to reach and projects to complete. A New Year’s classic. 2024 is around the corner, just as this year one gearing up to say goodbye, thanks for the memories. That also means the pressure is building up to reach certain milestones or have our entire lives figured out for the following 365 days.
Starting a business is hard work in any environment, and doing so in the midst of economic challenges requires an extra level of determination and strategic thinking. While economic uncertainties may seem scary, they also present opportunities for innovation, resilience, and adaptability. If you are thinking of becoming an entrepreneur, consider the following tips for successfully building your business in a challenging economy. The small business survival rate is two-thirds surviving in the first two years and 50% surviving at least five years.
Joshua Kato is a Chartered Tax Accountant with Uganda Baati Limited
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Tough economic situations can be a very challenging period for both individuals and businesses. People lose their jobs and cut back on spending, and cash reserves start to dwindle. Credit markets become tighter, and banks begin to increase their lending restrictions. This probably makes you wonder whether it even makes sense to consider starting a new enterprise and, if you think it does, how do you do it? Part of your success depends on the kind of business you intend to start, so choose a structure that can thrive when times are tough.
1 - Find Funding – In securing financing for your intended business, come up with a financial plan to ascertain your initial revenue projections. Before applying for a loan, ask trusted friends or professional advisors to review your business plan to ensure you're not overlooking anything critical or making inaccurate assumptions. Often credit unions offer lower interest rates and fees than commercial banks, so don't narrow your search for financing down to only big banks. It is a good idea to build up your cash reserves to have enough to live off for six to 12 months. Make sure you budget carefully, so you can continue making your most crucial payments like rent/mortgage, utility bills, and food. Endeavor to check your financial gut to make sure you're ready to start your new venture.
2 - Start Small -with a plan to expand – Perform a review of your business plan and reconsider what you need to start. You can consider opening up your business in a smaller and less expensive location or you could even operate online(virtual) by avoiding a physical office, get part-time staff. Be realistic about the entire idea of a business.
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3 - Use technology to your Advantage - Establishing a strong online presence through websites and social media expands market reach globally. Cloud services minimize infrastructure costs and enhance scalability, providing a flexible foundation for growth. Embracing emerging technologies fosters innovation, setting startups apart from competitors. Nearly all small businesses need to use social media marketing on Facebook, Instagram, LinkedIn, and other social media sites to reach a broad audience in cyberspace. Digital marketing on social media creates a buzz of awareness around your brand, drives sales, and can be an affordable way to market your new business.
4 - Embrace Networking – It is very hard to thrive in business without networking. Get to know other people in your community who can refer customers and help build your business. Don’t know where to start? Find a local business networking group, we have almost rotary clubs in every area, consider joining a professional association—either a local one where you can meet people in person or an online group—to tap into others’ ideas. This has been my game changer the last three years!
5 - Do Smart Marketing - Starting a new business when the economy is taking a nosedive takes creativity and ingenuity. Marketing is vital to getting ahead of the game and your competitors. Take your business plan and flesh out the marketing components: What exactly are you going to sell? Who are your target customers? How will you price your products or services? What is your plan for promoting your business? You typically stand a better chance of succeeding by thinking niche. Slice and dice your original customer base to come up with smaller segments so you can market more strategically.
6 - How can I start a business with No Money? – I have numerously received this question from friends on how to start a business without money. Starting a business with no money is undoubtedly challenging, but with resourcefulness, creativity, and determination, it's possible to launch a venture by; - (i) Utilizing skills you already possess to avoid the need for extensive training or hiring. This reduces the immediate financial burden on your startup, (ii) take advantage of free tools and resources available online. From website builders to social media platforms, numerous resources can help you establish an online presence at no cost. (iii) Offer your services as a freelancer or take on side gigs related to your business idea. Use the income generated to fund your startup and cover initial expenses, (iv) Cut costs by operating from home or using online platforms. This eliminates the need for expensive office space and reduces overhead expenses, (v) Forge partnerships with other businesses or individuals who complement your offerings. Networking can open doors to collaborative opportunities that don't necessarily require financial investment.
With determination, strategic planning, and a focus on leveraging technology, entrepreneurs can navigate the complexities of economic challenges and build thriving small businesses.
