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Starting A Business in A Challenging Economic Climate, Part 2 (Limiting Risk)

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Starting A Business in A Challenging Economic Climate, Part 2 (Limiting Risk)

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    In Part 1 of this series, I talked about why now is a good time to start a business. But without Part 2, Limiting Your Risk, you may be setting yourself up for problems. Now is a great time to start a business, but part of starting a business in this kind of economy is playing it smart.

    How You Can Limit Your Risk:

    When you start a business in challenging economic times, you’ll want to limit your risk as much as possible. There are several ways to go about this, but here are my top recommendations:

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    Get it right at the beginning. A lot of budding business owners skip crucial steps on their way to a business launch. I can’t tell you how many clients have come to me, a year or two into their businesses, without having set up their companies with the Secretary of State, the IRS, or having met with an attorney to help them set up their operating agreements. These are things that could get you in a lot of trouble if you don’t do them the right way.

    There are other steps that won’t necessarily get you into trouble, but may cause some headaches if you don’t get them right. Branding is an excellent example of one of the most-missed (and most misunderstood) steps in entrepreneurialism. It’s also one of the things that can make or break your company.  Choose a generic business name like “ABC Consulting” or create a brand that doesn’t intrigue your target market and you’ll start your business heading down the wrong path.

    Choose an industry that’s hot or one that’s a “need.” Generally, you want to go with the industry you know best, but at the same time, you can’t ignore what most business experts define as the wave of the new future. Currently, the hottest trends are green businesses, health care, natural beauty, discount retail and luxury, credit and debt management, and technology. If you can find a way to spin what you already know into one of these hot business areas, you’ll take advantage of the coming upsurge in these industries.

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    On the other hand, I also believe in going after the “needs” of your consumers. For example, I once worked with a guy who was a chimney sweep in the winter (something people need) and a custom SUV builder in the summer (a luxury people want). His winter need-based business was one that provided enough income for the whole year, just in case his want-based business waned in the summer.

    Start with a low-risk business model. When I work with a client to design a new business, we typically use what I call a “leap-frogging” or “dovetailing” approach. This is where you start your business using a low-risk business model and build from there, using the income from the first model to fund expansion and growth into more complex business models. This approach almost always allows my clients to start their own businesses without seeking any type of funding from lending institutions, venture capitalists, or other investors.

    Plan ahead. If you lose your job, there isn’t much you can do about that. And in this economy, you’d have to work a part-time job in addition to your regular full-time job to save up enough for the six to twelve months of living expenses I generally recommend when clients want to start a business they can work full-time from the beginning. But if you can keep your job and start your business part-time, you’ll reduce your risk substantially. This allows you to maintain a steady income while you’re building your business, and eventually, you can make the transition to being self-employed, full-time.

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    Market research can save you a lot of time and heartache. Before you head into any business startup, you want to know your market inside out. More than that, you want to know your target market. There are lots of ways to do the research. You can do your own research (called “primary research”) or you can use information compiled by others (“secondary research”). Both have their pros and cons, but the questions you want to answer are:

    • Who is my target market?
    • What do they want?
    • Can I deliver it to them?
    • If I deliver what they want, will they buy it?

    Leverage free and inexpensive marketing methods to build your business. A lot of new entrepreneurs develop complicated, expensive marketing campaigns before realizing how many ways there are to get the word out about their businesses without spending a fortune. And with the power of the Internet literally at our fingertips, it’s easier now than ever to build awareness for your brand. However, that doesn’t mean you should go out and build a giant Twitter following. There are so many online options, but all of them may not be appropriate for your target market.

    Get the right help. Before you launch a company, you want to find professionals who can help you start on the right foot. There are countless people out there calling themselves “consultants” and you have to be careful who you choose. The ideal business consultant for you is someone who understands a lot of different business models, especially the low-risk ones, and who can help you figure out the model that suits you best. You want someone you find personable, someone who knows what they’re doing, and someone you can trust.

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    In addition, make sure they don’t make promises that are too good to be true. A lot of business “experts” I’ve seen lately offer what amounts to “get rich quick schemes,” while others offer such vague information that you’re compelled to keep buying more books and products to get to the “real” information….which never actually comes. Instead of wasting your time on these folks, find someone genuine, real, and honest, who may not promise you the sun, moon and stars super-fast, but who can help you build a solid, stable income with real growth potential.  Work one-on-one with them to develop a sound business model and a strong brand with a viable marketing strategy that you can easily implement. A good business consultant will know how to work with whatever budget you have and tailor solutions to your needs. Plus, they should have an army of other professionals who can also work within your budget, but still offer high quality work.

    Build your team. Speaking of other professionals, you will need your own little army. In addition to a business consultant, you’ll also want an accountant, an attorney, a graphic designer and a web designer, and you may also want a virtual assistant and some other consultants, most of whom your business consultant probably has access to.

    Starting a business in an uncertain economy can feel risky, and it certainly has stopped a lot of people from moving forward with great ideas. But if you look at history and remember that some of the most solid businesses today were started in just such an economy, mitigate your risk factors and hire the right professionals from the start, you’ll give yourself a fantastic leg up on your competition, and set yourself up for success.

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    Susan Baroncini-Moe

    Susan Baroncini-Moe is an executive coach and business leader with over sixteen years’ experience.

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    Last Updated on January 13, 2022

    15 Best Places for Expats to Live (And Why)

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    15 Best Places for Expats to Live (And Why)

    Many of us dream of living abroad but can often be scared to make such a big change to our routine lifestyles and leave our home countries behind. Daunting as it may be, living abroad can be a rewarding and fulfilling endeavor and can give you the quality of life you have been looking for.

    From a warmer climate to a more easy going way of life, there are many foreign countries favored by expats who stay for a long time – and sometimes forever. Taking into consideration livings standards, opportunities and social aspects, here are our top 15 best places to live as an expat and why.

    1. Thailand

    A hot spot for expats, the ‘land of smiles’ as it’s commonly known offers expats a tropical climate, a huge array of sandy beaches and islands to explore, and a rich culture. The cost of living in Thailand is extremely low, and when combined with the friendly tax system means that disposable income can be very high.

    Bangkok, Thailand’s capital city, offers expats great employment opportunities.

    2. Switzerland

    Another popular destination for expats, Switzerland offers exciting employment packages and a high standard of living. It’s great for those who love the outdoors, as there are many beautiful lakes, mountains to hike in and skiing in the winter. The school standards for expats are also excellent, making it appealing for those with children. English is also widely spoken so day-to-day living can be stress free.

    Unemployment in Switzerland is low and expats moving here don’t need to worry too much about finding a job before they arrive.

    3. Australia

    Many foreigners who visit Australia don’t want to leave as it offers a great quality of life, beautiful beaches and a warm climate. Making friends in Australia is easy too, due to the lack of language barrier and the large number of expats who already live here. Australia is a great place to move to if you have children because of its wide range of schooling possibilities and recreational outdoor activities.

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    Low population levels and high quality of life are two of the main reasons expats choose Australia as a place to live.

    4. Singapore

    Expats in Singapore can benefit from generous financial packages, great career opportunities and low tax rates. Although education is expensive here, it is rated one of the top places for raising children abroad due to the quality of the education system and the array of schools.

    Public transport such as buses and MRT (Mass Rapid Transit) are cheap and very reliable in Singapore.

    5. South Korea

    South Korea offers expats a unique range of opportunities and a very different way of living. Jobs for expats are easy to find and usually very well paid, with apartments provided by the employer on the most part making living costs even lower. There are also many tight-knit expat communities in South Korea, making it easy to socialize and meet new friends. The excellent education system is also a pro for families wanting to move to this culture-rich country.

    South Korea has a cheap public healthcare system and offers great medical care, with most doctors speaking English.

    6. New Zealand

    New Zealand is constantly on the lookout for skilled workers to expedite to the country – especially those under the age of 30 – and skilled migrants can be granted a stay for up to five years. It offers a good climate and although income levels can be lower than other countries, quality of life is high, with its awe-inspiring scenery, low crime rate and state sponsored healthcare.

    New Zealand is great for those looking for a laid back and active outdoors lifestyle.

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    7. Canada

    Its national healthcare system, friendly locals and very high quality of life are just a few of the reason expats choose Canada as a place to live. It’s very welcoming to expats and skills shortages encourage foreigners to move here in order for the country to grow economically. It’s easy for expats to feel comfortable quickly in Canada due to its multicultural environment.

    Canada was largely unaffected by the economic crisis, making it a very popular country for expats.

    8. Qatar

    Qatar is becoming increasingly popular among expats with an estimated 500 new arrivals every day. The salaries are generous and are tax free too, making disposable income very high. Car and housing allowances are part of many remuneration packages, and education for your children and airfares are often included.

    The cost of living is lower in Qatar than in other UAE countries but salaries can still be just as generous.

    9. Hong Kong

    Where east truly meets the west, this bustling island has a population of over seven million people. If you’re looking for a fast-paced environment and an active nightlife, Hong Kong is definitely the place to be. Benefits for expats include its advanced healthcare system and elevated standards of schooling for children, along with great employment opportunities. The cost of living in Hong Kong can be high, so trying to negotiate a housing allowance with your employer can be beneficial.

    Hong Kong is great for those looking for high incomes and career advancement.

    10. Japan

    As an expat destination, Japan offers a rich culture and a chance to experience a very different day-to-day life. Currently around two million expats live in Japan, and in the larger cities such as Tokyo a large portion of the population speaks English. English speakers are also in demand and there are a large number of opportunities for language teachers, especially in the capital.

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    Japan offers a high standard of living for expats and a good education system for those with children.

    11. Spain

    Spain is a very popular destination for expats due to the high temperatures and year-round sunshine. EU residents don’t require a visa to work here, meaning the move can be a lot easier. Skilled foreign workers also continue to be in demand with jobs such as engineering, customer service, skilled trades and language teachers widely available.

    A huge 14% of Spain’s population are expats from a variety of foreign countries.

    12. Dubai

    Two of the main attractions of moving to Dubai are the tax-free salaries and the warm climate. Some of the most popular jobs for expats are in construction, banking, oil and tourism. You can also enjoy a busy social life in Dubai as the expat community is thriving. Although it can be an expensive country, the tax-free salary means you experience a higher quality of life than in other countries.

    You will need a work permit, residence visa and an Emirates ID card to live in Dubai as an expat.

    13. Germany

    Germany is one of Europe’s most populous countries, with around 82.4 million people. It’s a lively and inexpensive country to live in as an expat, and if you have children the education system is great and healthcare is to a high standard. An estimated 250,000 expats live in Germany currently, with the numbers rising every year.

    If you are already an EU citizen, you don’t need a visa to live and work in Germany.

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    14. The Netherlands

    The Netherlands is a great place for expats who love the outdoors. Cycling is one of the main modes of transport and looking after the environment is widely recognized. There are a lot of English speakers in the Netherlands too, but learning the language can work to your advantage and make day-to-day life that little bit easier. Skilled expats can also benefit from a tax-free allowance equivalent to 30% if they meet the correct criteria.

    It is often more important to be able to speak fluent English than to speak Dutch when looking for employment in the Netherlands.

    15. China

    China offers expats great employment opportunities with little competition. Those who embrace the culture and decide they want to live in China long term can see a host of employment opportunities as its economy is growing rapidly every year. Economists predict it will overtake the US as the world’s largest economy by 2018. China also offer expats low living costs and high disposable incomes, which is why many look to live here for a higher quality of life.

    Shanghai and Beijing are the most popular destinations for expats who live in China.

    Featured photo credit: Saulo Mohana via unsplash.com

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