Obama is finally about to help the economy the best way he possibly can. Trying to stimulate the economy through individual tax cuts and increased federal spending is one way to tackle the problem. The game changer that is about to be introduced deals with small businesses.
Small businesses are traditionally the leaders coming out of a troublesome economy. The best way to undermine unemployment is to start your own business. It seems like a recession would be the worst time to try and start a business but think about the following ideas. Recessions come with smaller costs for the consumer. Large businesses want to lower inventory and sell everything they can even with lower profits. You will find the best prices to fulfill your business needs. Recessions are also met with lower interest rates. Should you qualify to get a decent loan, the rates are low enough to kill for.
Since the long term cost of the TARP program is going to be cut by around $200 billion, Obama is proposing aid to small businesses. Although not all this money will go toward small businesses, they should see a small chunk as extensions of the stimulus plan roll out in 2010. By giving tax cuts and credits to small businesses, the economy will have a better chance of roaring back up faster than initially hoped for. Small cap stocks also perform better than large cap as the economy improves. With a little patience and help from Congress, there is cash money to be made in small companies over the next few years as the economy roars back to life.
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While this may be an ideal time to start a small business do you think that in 10 years you will still be making the profit you hoped for? While Obama's stimulus package may initially help you out now, what about 10 years down the road? By then the large businesses and corporations will be back and by then they will easily be able to run their costs down enough that my small business will need to go out of business. If that happens, wouldn't I be in the same place I am in now? Also what type of small business should would you recommend?
ReplyDeleteThe majority of small businesses fail within the first few years of starting it. If you are innovative and lucky enough to keep yours running, the chances of keeping it up for 10 years really depends on the location and type of business. The best small businesses will most likely be bought out by other businesses because of the fear of competition. If what you do works, larger companies will take notice. If you want to start up some type of mom and pop store or restaurant, you need to find a little town to live in that hasn’t been corrupted by the Walmart’s and fast food franchises.
ReplyDeleteThe stimulus package is meant to help a player get off the bench and get a shot in the big leagues. The opportunity only comes once. It is your job to capitalize off the opportunity and work hard to get the starting spot and to keep it. The best small businesses to start are companies that reflect what the consumer wants or needs. From the success and failure stories I have read over the years, there are really three places to be in this situation. First, find great sellers that are missing something. The consumer will let you know what they think they need. This is usually some type of accessory. If you can create some type of product or service that further wants consumers to buy an already great seller, you have a quick path to pumping up profits and maybe even a buyout offer. Second, start a business that reflects a disproportionate amount of supply and demand. This is usually about location. If you want to start a tax or financial planning service, why not try starting one around a huge retirement center in Florida? This gets right to the issue that older consumers need people to do their taxes for them and to make sure they will make it financially in retirement. Finally, the best business venture that a lot of people try out deals with the internet. If you can make some type of website or computer programming idea that would help out websites, this is the way to go. This is where you need to find a service that makes something easier for the consumer. This way you can rent out your service to different websites or just sell it to a large company.
The thing that we all need to remember is that the stimulus plan is supposed to help us get back on our feet. It is not supposed to be there for us once we start running again. To create a small business you have to create something unique or something that makes a product or service even better. By the time big businesses get back around, you want to have already captured a market with a strong business plan. If you create enough brand loyalty, big businesses will not have an option but to buy you out or move on.