Six (mostly) recession-proof small-business ideas
With most companies facing tough times, many small-scale businesses are betting on niche services to beat the economic downturn.
For some small businesses at least, the Canadian economy may finally be stabilizing, suggests the Canadian Federation of Independent Business (CFIB).
Based on recent business confidence findings, the Business Barometer index has remained virtually unchanged at 58.5 since June and is up sharply from a seven-year low of 40 at the beginning of the year.
Measured on a scale from 0 to 100, an index level above 50 means small business owners expecting their company's performance to be stronger in the coming months outnumber those expecting weaker performance. Good news to those businesses struggling with everything from mounting receivables to higher fuel costs.
Truth is, though, the recession hasn't been equally severe for everyone. Some nimble owners and self-employed entrepreneurs have been able to insulate themselves from economic downturns, either by streamlining their existing operations or exploring niches far removed from larger corporate concerns.
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Successful smaller businesses tend to have a few things in common. They don't overextend themselves. They provide excellent customer care and their attitude reflects how much they value their business. As well, they make sure their customers really need and appreciate their unique blend of goods or services.
Thinking of joining them? Good. Whether you got here through job loss, shrinking retirement funds, or simply a desire to reinvent yourself, here are six small-business areas that are fairly recession proof, have reasonable growth potential and for which hit-the-ground start up costs should be quite manageable.
A growing industry often serving the small business sector itself, virtual helpers can be hired for just a few hours a week to do time-consuming work, such as coordinating meetings, setting up a customer contact database, routine correspondence, preparing and collating surveys, or doing background checks on prospective employees. Plus, employers don't have to pay for extra office space, furniture, equipment or software. Nor are there any pensions or benefits to worry about either.
Up-and-coming small businesses
Keep your customers coming back
Secure business by having a plan
Get more done with social computing
Managing email madness
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Even with a recession, education and learning are still a top priority for families everywhere. Regardless of their financial situation, parents want their children to learn and succeed in school and will be willing to hire someone to make that happen. But not all students are well served by the one-size-fits-all school, whereas an experienced tutor can set aside a block of time to work with a student, creating a dedicated, supervised environment for learning and homework. Adults who have been unemployed are also looking to upgrade their skills, particularly when it comes to technology, and will often opt for smaller training companies where they can get more customized attention.
Although Value Village may seem to have cornered the market, why not give cash-strapped shoppers a chance to pick up almost-new pieces at a fraction of their retail cost? Resale attracts a new demographic of both suppliers and customers during difficult economic times, according to the National Association of Resale and Thrift Shops. The association recently surveyed its membership to determine how second quarter 2009 sales figures compared to those of the same time period in 2008. Two thirds of respondents said sales were taking off, with an average increase of roughly 31 per cent.
Rising unemployment rates and a tanking economy are good news for pawn brokers which have improved their reputation as a legitimate avenue for those looking for a little help between pay cheques, notwithstanding the proliferation of larger payday loan companies. Customers offer something of value to the pawn broker in exchange for a short-term loan of a fraction of an item's value, generally at an interest rate rivalling credit cards' rates. They can then keep paying the finance charge each month and leave the item in "hock," pay off the loan to get it back, or simply walk away.
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Collection agencies, which have seen the number of accounts they have to deal with soar since the start of this downturn, are busier than ever. Not everyone has the personality to start a debt collection agency, however. Besides having all the attributes needed to be self employed and self motivated, a bill collector really needs to have exemplary mediation and negotiation skills as well as being persistent, patient and empathetic, says Michelle Dunn, author of Starting a Collection Agency: How to Make Money Collecting Money.
While there is an ever-growing trend of people wanting to simplify their lives, most of them just don't get around to it — which means there's a prime opportunity for someone to come in at a reasonable rate and get things going. By designing custom organizing systems and teaching organizing skills, you can help individuals and other small businesses take control of their surroundings, their time, and their lives, says the National Association of Professional Organizers.
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