The Great Recession of 2009 has created a new breed of entrepreneur– the I-don’t-have-a-job-but-I-was-once-successful-in-business-and I-don’t-know-what-to-do-with-my-life-since-I-can’t-find-a-good-paying-job-that-satisfies-me-quite-like-my-old-job-did-entrepreneur.
What’s interesting about this group is that they have great ideas, limited capital, and a mixed bag of preparedness for starting a business. Honestly, that’s a perfect combination!
The bad part is that since they don’t have jobs, they need this thing to take off instantly and provide for their families before their unemployment benefits run out.
I have a fundamental belief that people are at their best when up against that type of adversity. But while that kind of desperation can create tremendous energy to succeed– I’ve found that it can also lead to dangerous tunnel vision.
So here are my 6 Questions for Those Starting a Business as a result of getting laid off by the Great Recession of 2009.
- How little capital will you need to start generating positive revenue initially? In other words, how little can you invest to start making money with your idea now?
- What will you do to acquire customers outside of your sphere of influence? Your biggest weakness is thinking you have the contact base to maintain a business beyond 180 days– if you had that strong of a contact base one of them would have hired you by now. How will you grow your sphere beyond yourself in the first 30, 60, 90 days?
- Who are the gatekeepers to your success? Who are the power brokers in your niche and what do you need from them in order to succeed in this space?
- Have you defined the boundaries of your niche? What safeguards have you put I’m place to keep you in your niche?
- Is the product or service dependent or repeat business? If a repeat business, how will you manage customer relationships beyond the transaction?
- Is this a product or service that you need? If you don’t need it what makes you think it will keep you up at night making it awesome or that it will motivate others to evangelize your product?
What makes me qualified to ask these questions? In 2005 I started Youth Ministry Exchange with a small group of friends. We turned a profit on the first day and had positive cash flow every quarter until we were acquired by Youth Specialties in June 2008. In other words, I’ve done exactly what this breed of entrepreneur is attempting.