Even if you’re not worried about your job in a down economy, it’s common sense to watch your daily spending and cut back whenever possible.
Many consumers and small business owners think that with money this tight, it’s not a good time to start a business. We’ll say it’s a great time to start one.
Brick and mortar small businesses are a huge investment when money is tight, but web based businesses have lower overhead, and much lower startup costs. Internet businesses can be setup in a home office, and be worked on during a young entrepreneur’s free time. If you choose a professional and responsible web development team, you can be up and running in less than a week.
Internet startups are lucrative in a down economy because of the popular growth of online shopping In the first quarter of 2008 online based business revenues were $32.4 billion. Up 13.4% from the third quarter of 2007.
And more and more online shoppers are turning to the web instead of paying for gas to go to the mall.
A poll conducted by RetailMeNot.com, an online coupon website, found that nearly nine out of 10 American consumers have changed their shopping habits as a result of high gas prices.
The poll found that out of more than 1,000 respondents who voted multiple times:
- 45 percent said they plan shopping trips together to use less gas
- 42 percent said they shop less
- 22 percent said they do as much shopping as possible online
- 11 percent said there was no impact
Whether or not the economy is bad, there are some best practices to keep in mind when opening an online business. Here are a few tips:
- Have a niche or focus on a specialty category. Since you're essentially competing with box retailers like Wal-Mart or Target when you enter the online retail space, "be sure [you're selling] something niche-oriented, such as fashionable maternity wear or urban street wear," "Or focus on a specific category, like shoes, but that's all you do. But offer great custom service, such as making it easy to return shoes."
- Offer an innovative marketing technology.
- Keep pricing in mind. Even if you are selling a niche product, always keep pricing a priority.
"You are never going to compete with big box retailers on pricing, but perhaps there is a promotion or value-added program you can offer that helps people deflect that or takes their minds off of pricing."
A unique product, an innovative marketing technology and a promotion to help customers deflect prices are important business strategies during a recession because people have less discretionary money to spend.
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