Recession Start-Up Snags And Solutions

Grunt puff puff, are we there yet?

From the original blog post by Melanie Lindner

Launching a business is hard enough--doing it during a recession takes major guts, a heck of a value proposition and a serious threshold for disappointment.

"I have absolutely seen an uptick in the number of people who are attempting to start businesses of their own since the start of this recession," says Janet Siegenthaler, a start-up consultant based in Fairfield, Conn.

Before you liquidate your 401(k), check what these recession-born entrepreneurs many who have not yet posted a profit had to say about starting businesses in the last 18 grueling months.



Becca Brown, 30, and Monica Murphy, 30

Business: SoleMates, Old Greenwich, Conn. Markets and sells the High Heeler, a $12-per-pair rubber stopper device that fits snugly on the stem of women's high-heeled shoes.

Obstacle: While not initially high on their list of priorities, having a working Web site became a crucial--and frustrating--component to getting SoleMates off the ground. "It was extremely difficult to find a Web designer who shared our vision," says Murphy. "We had to delay our launch since we didn't want to have a product on the market without a Web presence."

Advice: "Everything costs twice as much and takes twice as long as you plan for," says Brown. "No one else will be as invested in your business as you are, so don't expect everyone to follow through when they claim they can help you." (For more on smart Web design, check out: "16 Solid Small-Biz Web Design Tips.")
Need help running your small business? Ask our cadre of experts at the Forbes.com Small Business Exchange.



Doron Reuveni, 42

Business: uTest, Southborough, Mass. Provides testing services for software, Internet and mobile application companies. Launched in August 2008 with $2.3 million in funding from venture capital and angel investors; rousted another $5 million in a second venture round in November.

Obstacle: Convincing investors that he had a viable product. "I've had this idea since early 2007," says Reuveni, "but without investors, it was difficult to get off the ground."

Advice: Don't rush the process. "It might take a little longer to get your business going, but be persistent," says Reuveni. "Take small steps."



Charisse McAuliffe, 31

Business: GenGreen, Fort Collins, Colo. Manages a database of more than 45,000 green businesses and organizations in the U.S. Licenses its content to National Geographic and News Corp.'s Web sites. Launched in February 2008 with $250,000 in savings; later landed $750,000 from angel and private equity investors.

Obstacle: Finding the right sources of funding. "It's been harder to find quality investors," says McAuliffe. "Now that we're up and running, I'm getting as many as 10 solicitations per day, but for the most part they're not viable options."

Advice: Use investor networking tools. "I've had great results with Angelsoft.net," says McAuliffe. "They streamline the application process for start-ups looking for funding, and they vet the investors for you."



Philip Foote, 34

Business: Philip Foote Law, New York, N.Y. Law firm, mainly for clients in the construction business. Foote bootstrapped his practice from personal savings in early 2008.

Obstacle: Getting the word out. "Most lawyers don't take [out] ads," says Foote.

Advice: Show your face. "E-mails might seem like a great and easy way to promote your business, but nothing works as well as face-to-face contact," says Foote. "You have to get out there and build real relationships with potential clients." (For more on effective local-advertising tools, check out "How To Get The Word Out Locally.")



David Jones, 48, and Ed Basconi, 55

Business: Edamar, Johnson City, Tenn. Makes, markets and sells the KitBook, which teaches kids (target age: 12) how to build electric circuits and contains all the necessary equipment (price: $40 a kit). Bootstrapped from personal savings amassed as engineers for Siemens.

Obstacle: Tight educational budgets. "One of our sales representatives recently said he hasn't seen such a tough environment for selling education tools in 15 years," says Jones. "We're hopeful that once the stimulus-package money starts flowing, school districts will start picking up our product."

Advice: Be prepared for long hours and little pay. "I'm a marathoner, so I know about hard work," says Jones, "but this is above and beyond."



Taylor Spellman, 25

Business: August Black, New York, N.Y. Interior design shop catering to young professionals, many in the finance industry. Launched in March 2008 on personal savings and credit card debt.

Obstacle: Target clientèle have seen their bonuses go up in smoke. "Many of them lost their jobs, or never got those bonuses, so they're wary of discretionary spending," says Spellman. "I've had to cut my fees from $100 per hour to $50."

Advice: "Be sure to have some money in the bank as a cushion," says Spellman. "If you're not willing to go into debt, this probably isn't the right time to start your own business."