My business has dried up with the economy; should I be looking at a new venture?

I just stumbled across your postings and read all of the the most recent ones.  You are geared for youth it appears but I liked your energy and the fact that you actually answer a question and refrain from pontificating.

My question:  I’m an older female (late 40s) who exited Corporate America about 3 years ago to join a small financial intermediary company.  Business has all but disappeared at the small end where we are focused.  What services could we add for income AND for value to clients?  Or given the outlook for the economy through 2011 – should I be looking at a new venture?  I hold an MBA (not Ivy); Master of Tax and a CPA (inactive).

The Harvard MBA says:

These are certainly tough times for both entrepreneurs and Corporate America.  While startups have a high failure rate during recessions, a lot of corporations also go through major layoffs.  I remember one fellow who left one of my startups to join a big company because he felt he needed the extra security.  He was laid off a month later.  To some extent, you have to pick your poison.

Without knowing your exact line of business, it’s hard to say whether or not to pull the plug on your venture, but I can offer some general advice:

1) Ask yourself, “If I weren’t already in this line of business, would I choose to get into it today?”  Logically, you shouldn’t stay in any business that you wouldn’t join today if you were free.

In practice, it’s not a good idea to cut an run the first day that you’re feeling pessimistic, but many entrepreneurs identify so much with their businesses that they prefer going down with the ship to living to fight another day.

2) Evaluate your business by asking three simple questions: a) “Do I have a great product or service?” b) “Is my offering better than the competition’s for my chosen market?” c) “Do I have the ability to market and sell my product cost-efficiently?”

If the answer to any of these questions is no, take a close and objective look at the business.  You may not need to exit the business, but you may need to improve the product, focus on a better market niche, or change the way you market and sell.

3)  As my friend Eric Ries has written, if you need to make a change, pivot to your new position rather than completely abandoning your roots.

Let’s say your business had previously succeeded by selling product X to market Y.  Far better to try selling product A to market Y or product X to market B (shifting only one of the variables) than completely jumping to a new product AND market.

The good news in all of this is that you are in the prime of your career and have a great set of credentials.  Good luck!

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