Advice for entrepreneurs in an uncertain economy

The news ticker on the TV at the gym shows the dollar falling, the morning paper forecasts economic doubt, and the economic outlook appears to be dreary everywhere you turn. While it may seem counter-intuitive, business experts will tell you that now is a great time for entrepreneurs looking to start a new business. Often, times like these are when fortunes are made.

But how can an aspiring entrepreneur go about starting a business when the market seems against them? How can someone with big plans and new ideas ensure success in a dramatically different economic atmosphere? There are two things that will always be essential in getting a new business off the ground; a water-tight business plan and capital.

From Drawing Board to Blackboard

Those possessed by the entrepreneurial spirit and raring to get their business up and running sometimes find it difficult to translate great ideas into a well-thought-out business plan. For those, a trip back to the classroom may be necessary. Many entrepreneurs consider enrolling in an MBA program in order to fine-tune business practices and methods before a real-world launch.

“I get to see people who are very talented walking in the door a little lost — perhaps lacking some skills, habits or practices — become great business people,” says Phil Siegel, a successful serial entrepreneur and teacher at the Acton School of Business.

While traditional MBA programs have faced criticism for churning out risk-inclined financial speculators and investment bankers that led to the near-demise of Wall Street, other MBA curriculums with a focus on sound business practices and principled entrepreneurship are seeing a spike in interest.

“An MBA isn’t just for someone looking to land a job on Wall Street anymore,” says Siegel. “There are a few great schools offering an education that teaches how to really start and run a business from the ground up.” A handful of respected schools focus on the skills necessary to build and operate a business by offering MBA programs with entrepreneurship-specific tracks.

Finding an Investor

For those who have the entrepreneurial enthusiasm, the know-how, and the structure in place to start building a business, but don’t yet have the funds to do so, the next step is finding an investor. Siegel says not to get discouraged even though investors may seem more tight-fisted given the economic downturn. “If you’re looking for money for a new venture, there are plenty of investors out there,” says Siegel. “The current economy hasn’t really affected the enthusiasm for great ideas.”

However, he cautions that all the normal “do’s and don’ts” of seeking funding are magnified in this kind of environment. Siegel urges entrepreneurs to:

1. Have a plan. “Come up with a business plan that is clear, concise, internally consistent and reasonable for the market opportunity.”

2. Know your customer. “Understand your customer and know why they would buy your product or service instead of what they buy today. Do market research, and have customer ‘pilots,’ if necessary, to prove that your product has value.”

3. Seek out experts. “Bring experts to your aid; they can help increase your credibility. In good times, people tend to believe your story, but in bad times, they’re more skeptical.

4. Prepare for profits. “Having done your business planning and preparation, ask yourself how you’re going to spend the money you are seeking. Who do you want to invest in your venture? What milestones are you going to reach in this round of investment capital? What will you need in terms of financing after you achieve your initial goals to get cash flows to break even?”

There will be many stops along the path to any entrepreneur’s first ribbon-cutting. Whether an MBA, an investor, both or neither are in their future, the advice given here should help any startup weather the economic storm.

“People are still willing to write checks,” concludes Siegel, “they’re just a little bit more careful, and a lot more cranky.”