Can you still make a million in the current recession ?

You bet you can! Bank finance may be in short supply but there are lots of great low cost opportunities out there – especially on the Internet.

The key commercial considerations about setting up a new business as follows:
•    Do you have an idea that will appeal to a market that you can define and then reach?
•    Do you feel passionately about that idea and the fact that you can do a better job than the people already serving that market?
•    Are you prepared to work extraordinarily hard to get the business started and thriving?
•    Have you got or can you get the skills and experience for the actual job you are going to have to do.
•    Can you get the funds necessary to start the business up?

In the case of the first four points, whether the country is booming or busting makes no difference to your answer.  The last point seems more problematical, what with a credit crunch - the banks are licking their wounds and sulking in their tent, refusing to lend money even to people with good ideas. But you can get round that,  There are other ways of raising finance than impressing a sceptical, and frightened, bank manager of the merit of your idea.

After all, when interests rates are .8% for a cash ISA, your friends and family will be keener than before to back a business that has a reasonable chance of getting a much higher return.

The secret when launching a business is to keep costs low and make every penny a prisoner. And there is no better time to do that than when times are tough.  Negotiate for everything - landlords lose a year’s profit if their premises are vacant for three months; so they’re willing to do deals.  And so it goes on, you can really clamp down on costs when everyone is facing the prospect of doing less business.

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Tips from Shaf
The worst answer to the question “Why are we doing business with these people” is “Because we have been doing so for years and we have a good relationship with their people.” People have a huge inertia caused by their relationships with their current suppliers. 

Two lessons here:
1.    Don’t let it happen to you.  Make sure that all your suppliers are aware that you are consistently looking for cheaper ways of buying the products or getting the service.

2.    Look for opportunities to shake people out of their inertia by offering better terms. A taxi operator I know offered a perfectly good service from a town about 15 miles away from Heathrow taking business people to the airport.  He got an appointment at a big company in the area and offered to undercut their current supplier.  They were nice but used the ‘long time… good relationship…’ argument to turn him down. 

He went back as the credit crunch started to bite and got the business.

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One more thing when you are getting a business going; avoid the super car trap. Leave buying the Ferrari until you’re officially on the rich list and at all times keep your feet firmly on the ground.