"There's no money to be made in this town."
"You're going to have a really tough go at it
here."
"Why would you want to open a business here when so many are
going out of business?"
Why? Good question. Your first response might be "Because I
want to," but it's not going to get those naysayers off
your back, and it definitely won't pay the bills. If you're
thinking of starting a business in a town that sports rows of
faceless storefronts and "Going Out of Business" signs
and a little more graffiti than graphics, you've heard the
comments. No one believes you, or anyone in their right mind,
should open a business in the area.
While appearances are dismal, your prospect for profit
needn't be. The area where you hope to build your business
doesn't have to be in Podunk USA to be considered a
"losing" town. There are pockets within almost every city
and town that beg for either renovation or a wrecking ball. You
could be smack in the middle of Los Angeles and still wonder
whether consumers will find you, buy your product or service and
make a success of your idea.
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The fact that you've chosen the site you have shows that you
hope to be part of a solution. And while the disadvantages are
obvious, there can be some major strategic advantages to your
choice of location. You might qualify for substantial tax credits
and benefits, lower lease or rent rates, low interest loans and
even expedited city permits. Find out by calling the local SBA office, Economic and Resource
Development Department or Community Redevelopment Agency.
"But no one has any money to spend around here."
Say it ain't so. People at least need the basics, yes? Look
around your area and notice the quality of businesses. Junky
displays, homemade signs, high prices and poorly kept businesses do
not a confident consumer make. Who wants to spend money where they
feel like they're getting taken? Give the community a place
residents can be proud to frequent, and offer fair prices for
products and services they want and need.
Says Diem Van Groth, founder and CEO of ZGyde Inc., a Los
Angeles-based urban-focused business and technology development
company, "These [economically depressed] areas are proving to
be some of the hottest targets for savvy redevelopment
mavens." According to Van Groth, the economically depressed
areas are untapped gold mines for the motivated entrepreneur.
Still, starting any new business requires hard work, lots of
forethought and a great amount of moxie. If you're in a
depressed area, you'll have more to prove, not just to your
negative adversaries, but to your lender, your suppliers, and your
potential customers as well. On the other hand, securing financing
for your venture shouldn't be any more of a process for you
because you're in an economically depressed area. If your
business plan covers all the bases (strong idea, targeted market, a
plan to reach that market and a responsible fiscal plan), lenders
should be just as willing to be repaid by you as by any other
entrepreneur. Jerry Darnell, director of the Small Business
Development Center in St. Joseph, Missouri, a city with a current
population of about 74,000 and virtually no growth, notes that a
good business idea is a good business idea, and a good entrepreneur
"doesn't base an idea on how the economy is doing,"
but rather, on a solid plan.
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