Today’s snapshot starts with next year’s 10 hottest startup sectors and includes a story about Ben Huh’s journey from near-death and how one entrepreneur made a business out of cooking bugs.
Consider this a fortune-telling post. As the editors of Entrepreneur write, there are really just 10 great sectors in which to start a business next year. A few include collaborative commerce (think Zipcar), urban farming (ever heard of Food Sprout?) and extreme fitness (check out Tough Mudder and expect to come away either inspired or nauseous).
It’s rare to hear raw emotion in a blog post, but Ben Huh, founder of the Cheezburger Network, has accomplished just that on benhuh!com. After failing in his first startup, Huh fell into a deep depression that almost ended in him taking his own life. One day he realized that his life was worth living. As hard as it was, he believed in himself and started what are now culture icons: FAIL Blog and I Can Has Cheezburger? His lesson: never give up, banish your self-doubt and swing for the fences.
Small banks are having a tough time in today’s economic climate. As The Wall Street Journal’s Dan Fitzpatrick and Rob Barry report, banks with less than $10 billion in assets cut 2,714 jobs in the third quarter. Also unfortunate: banks that cut jobs outnumbered those that added positions by 605—a major change from the second quarter where 659 more banks grew than cut staff. Why the sudden change? Small banks are suffering low loan volume, government regulations, competition, and rising expenses.
From 2004 to 2006, it was customary for many small business owners to take out an equity line of credit in order to secure a loan for their business. But those were the good old days. Now that the housing market has crashed, an increasing number of small business owners are coming up short on cash. As Ian Mount of The New York Times writes, business owners who do own home don’t have much equity left, thereby eliminating the possibility for a line of credit. Have you succeeded in leveraging your house for business?
It’s official—I’ve heard it all. Who knew that you could make a business out of cooking bugs? Well, as Jan Fletcher of Intuit Small Business Blog writes, that is exactly what Monica Martinez is doing. In August, hungry San Franciscans lined up at her food stall, Don Bugito (clever) to eat tacos filled with edible insects and worms. Her business is working—an incubator kitchen has even backed it.
While this seems to be strange advice, Joan Magretta of Harvard Business Review is adamant. She writes that competiting businesses should not focus on who is the best, but instead concentrate on what makes them unique. Every customer is different, so play to your strengths and focus on your niche.
Think about this question in terms of marketing. Beyond your product or service, why do your customers keep coming back? As Drew McLellan writes on Drew’s Marketing Minute, the answer is key to refining your marketing strategy. So invite your five best clients to lunch and ask them why they continuously do business with you. Most likely it won’t be about what you’re selling; it will be deeper than that. Use their comments to find new forever clients.
Before you start a business, ask yourself this question: do you have 18 to 24 months worth of living expenses saved up? According to Bloomberg Businessweek’s Monica Mehta, entrepreneurs need a nice cushion before diving in full-time. So chat with your business partner about how long they can go without a salary, pay your bills on time to maintain a healthy credit score, consider deferring your student loans for a while, and increase your credit limit on existing credit cards. These tactics should help get you through the startup cash drought.
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