Did you know Microsoft started during a recession?

Wherever you look right now, there is bad news on the economy. Unemployment higher than for the last twenty years and more. Personal levels of debt almost unmanageable. Foreclosures crashing like waves on the suburbs and exurbs, washing away property values. The Federal Government going a trillion and more dollars into debt for the bailout and stimulus package (and then the budget to be added on top). However you try to spin it, this is a bad time.

Some people have stopped talking about a recession and are hedging their bets on a depression. What a difference a single letter can make! So what should entrepreneurs do. Those with good ideas could sit on their hands and try to wait out the recession before starting up. Those already in business could simply hunker down and hope to survive. But both are strategies lacking confidence.

Those of a more conservative and risk averse disposition might argue that starting up now is reckless and, in some cases that would be true. Anyone who drew up a business plan before the recession hit would undoubtedly be courting disaster now. But if someone looks with a clear and steady eye at the world as it is and responds to current demand in the prevailing market conditions, there has never been a better time to start up. Property values are dropping fast in the commercial rental market so getting business premises is cheap. There is an abundance of talented people lying unemployed who would be grateful for the chance of paid work. If the plan calls for raw materials, there is a drop in demand so all producers are dropping their ex-factory and wholesale prices to keep some money turning over. If your business model fits market conditions, you should make money. It is the same with existing businesses. If owners are prepared to respond to the change in conditions and are not caught up in legacy costs of high pay and benefits packages for employees, there is no reason why the business plan cannot be modified to fit current conditions and let the business expand.

That said, whether it is to be a start-up or a refit of the plan, one of the key elements is going to be the right small business insurance policy. Whatever the business, it is likely that margins will be tight. There is great price sensitivity during a recession and customers with low levels of disposable income are not going to buy high-prices goods and services. Realistic prices are required. Thus, if anything should go wrong, there might not be adequate cash around to make good the losses. Business insurance covers against all the standard risks and perils. It provides deep pockets to cover losses when the events insured against occur. It may be adverse weather, a key person falling ill or an expensive court case alleging negligence. With the right policy in place, the business can come out of the difficulties relatively unscathed. Make sure you have affordable terms to keep your business going.

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