Business opportunities arise in tough economic times

Atight economy can be a good time to start a business.

Danielle Vallee, an Alexandria small-business consultant, pointed to a new Kauffman Foundation study that says that more than half of the companies on the 2009 Fortune 500 list and just under half of the 2008 Inc. list began during a recession or bear market.

It supports the premise in her newly released book, "Whiz Biz in Changing Times," that economic downturns present new opportunities to start a business.

The book is about creating a successful business in tough economic times. It also discusses how to lower, calculate and control startup costs and which types of businesses are best suited to different personality types.

Things change and people change during recessionary times, and that creates opportunities to fill needs that didn't exist before, Vallee said.

Some recessionary trends:

• A push toward local shopping. That encourages local entrepreneurship, she said.

"This is a time when small entrepreneurs are getting a better chance."

• Customer service is becoming more important to consumers. Big companies operate in an impersonal manner, Vallee said.

Small businesses are able to provide more personalized customer service.

A 19-year old, for example, started an on-site garage-sale business. The person goes to people's homes, selects what they'd like to sell at a garage sale, sets up a table, organizes everything, deals with buyers and browsers, then carts unsold items to the local Goodwill.

• Alternative lending is gaining ground.

Normally during hard times, finding seed money for a new business venture from traditional lending sources is tough, if not impossible. But social lending between friends and family is gaining status.

"We're starting to see [services] like that in the marketplace," Vallee said. "In hard times, people have a tendency to be kinder," Vallee said. "Entrepreneurs are financing their business with money borrowed from family."

• Companies are downsizing but still need services.Many cannot justify hiring anyone, not even part time, Vallee said.

That's an opportunity for new entrepreneurs to offer contractual services. They might provide accounting, translation, programming and Web site services. "There's a whole range of possibilities," she said.

• Entrepreneurs are increasingly mobile and need assistance while on the road.

That opens opportunities for virtual assistants -- small-contract workers who provide all kinds of services via the Internet, Vallee said. They can live anywhere and may never see the person they work for.

• People are more environmentally conscious. That's an opportunity for, say, an artist who can recycle materials into something new, a piece of art or craft to sell.

"Right now, people appreciate handmade things," she said. "There's a good perception of recycling materials, transforming them and making something beautiful out of them."

• Thrift stores are booming during this recession. Likely, there's a market for selling gently used kid's clothing, equipment and toys.

"Let's face it, kids grow so fast," Vallee said. "They don't have a lot of wear and tear on a lot of clothes, especially in the baby stage."

• In a recession, people still like to enjoy life. They eat out and look for other small pleasures at decent prices -- another business opportunity, Vallee said.

In hard times, "you still need a little bit of encouragement."

• People are paying to repair rather than replace items. That trend is an opportunity for people who, say, own tools and have a skill to start a business doing repairs, Vallee said.

  . . .

The bottom line is, "new opportunities are emerging in spite of, or because of, the recession, Vallee said.

"The main thing that future entrepreneurs should do is look at what's going on in their environment and see what needs they can satisfy."

Contact Iris Taylor at (804) 649-6349 or . Follow her on Twitter @RTDIrisTaylor.