The initial reaction in times of economic hardship is to buckle down and hoard money.  So, many would not even consider the idea of making an investment of your time and money to start a business may  not even enter into the minds of people. . . unless they have been laid off and are forced to find ways to make money in a time when few companies are hiring.

I have two friends- one who is a lawyer and one who is a banker  who were recently laid off from their jobs.  I helped both of them to start a “side” business while they engage in their job seeking effort.  The interesting thing is in the 4 to 6 weeks of starting a business, the entrepreneurial bug has hit them both. When you feel you have no choice but to find your own way to make money, you would be surprised at how effective you can be as an entrepreneur. One friend is now focusing entirely on his new consulting business.

Corporate America is a tough place to depend on for feeding your family and as you can see corporations can turn on a dime. Entrepreneurship is difficult in its own way but the essence of owning your business is you take total responsibility for your financial security.  You may not get all the perks of executive life, but what you do get is the ability to work on something you really want to do and make money at the same time.

I encourage EVERYONE, to consider starting their own businesses. . . even if you are gainfully employed.  Business ownership can give you an extra stream of income, significant tax benefits (which can reduce the overall tax you pay on your W-2 income), and some financial flexibility.

This current economy is just devastating.  While the Wall Street Journal contains story after story of the problems of large corporations, the small business market is also getting hit.  I have clients and business colleagues whose sales are down over 75% and who are facing major cash flow problems.

In my view, tough times are much rougher on small businesses than large corporate businesses.  Having to layoff employees is like turning away family versus just cutting headcount from a budget.  Vendors and other business partners are usually also good friends and so not being able to pay them is a lot more personal and emotional.

This is a time when good business planning comes in handy.  Many start automatically to think about throwing in the towel and filing business bankruptcy. Instead, you should try to think creatively.  Use your entrepreneurial and visionary skills to craft ways to get through this down turn.  Work together with your creditors and employees to see if there is a better solution than just the obvious one of business implosion and termination.

If you can figure out a plan for how to get through the difficult times, you will have a leaner and stronger business for when the economy does recover.  And, if you are lucky enough to be okay during this time, then you should be thinking expansion not hibernation.

You see, your competitors are cutting back.  You should be thinking about how to leverage the current situation to gain market share and establish a larger presence in your marketplace. Now you need to be cautious, but with any negative there are always positives and it is the astute and brave entrepreneur who is able to see and capitalize on them.