It may be no secret to Georgia entrepreneurs that small businesses — defined as those having no more than 499 employees — took a substantial hit during the recession. Estimates indicate that, by 2011, the number of small businesses shrunk by more than 337,000 than those that existed prior to the recession. For those contemplating business formation post-recession, there are some lessons to be learned.
The old adage that slow and steady wins the race could be the new battle cry for the survival of a small business in Georgia. Being conservative in growth estimates could actually ensure a business not only survives, but thrives. Taking on too much too soon — whether that encompasses inventory or clients — could result in substantial losses in the company’s critical formative years.
In fact, if a company requires inventory, shopping around for the best deals may take extra time, but it could save precious start-up capital. In fact, one small business owner who revamped his business after the recession does not hold any inventory himself. He is a middleman between buyers and sellers of computer equipment. Another company has limited its inventory in order to minimize its losses if something goes wrong. These and other small business owners that have started over after the recession are putting the word “small” back into their business.
Taking a more conservative approach to business formation is a trend that could ensure that the small business culture is here to stay. There are still a multitude of other business and legal issues to consider when forming a new company. Seeking advice and assistance in handling those matters could give an entrepreneur the freedom to focus on other things.
Source: spokesman.com, “Small Talk: Small-business owners learn recession lessons“, Joyce Rosenberg, July 6, 2014