Easier to be an entrepreneur in a place w/ a bad or good economy? (credit, debt)

[deportallofthem]

I've been thinking that it may be beneficial to move to some depressed town with wads of cash and open up businesses. It seems like I'd have no competition. Is this true? Or do you think it would be easier to be an entrepreneur where there is competition and higher start up costs?

[FarNorthDallas]

Why is the town depressed? No jobs for the people who live there? I would think it's economically depressed for a reason and I would wonder if the residents have any money to spend at my place of business.

[deportallofthem]

Originally Posted by FarNorthDallas

Why is the town depressed? No jobs for the people who live there? I would think it's economically depressed for a reason and I would wonder if the residents have any money to spend at my place of business.

Well, towns are usually depressed because of a lack of jobs. (My potential city inparticular had a mill that shut down.) Often a lack of jobs means a lot of people who will work for very little money. The low start up costs seem like a great entry for an entrepreneur without a lot of cash in reserves.

Also you'd use their poverty to your advantage (no, not in a greedy way). For example, start up a coin laundry, hot dog stand, or check cashing business.

[GreenMachine]

Originally Posted by deportallofthem

Well, towns are usually depressed because of a lack of jobs. (My potential city inparticular had a mill that shut down.) Often a lack of jobs means a lot of people who will work for very little money. The low start up costs seem like a great entry for an entrepreneur without a lot of cash in reserves.

Also you'd use their poverty to your advantage (no, not in a greedy way). For example, start up a coin laundry, hot dog stand, or check cashing business.

Well, if you are planning to "deport all of them," you may have trouble finding people who will work hard for very little.

Do you have any skills that you are really good at? I don't mean to offend, but you seem very focused on getting rich quick but very unfocused on what you want to do exactly. Do you know what it takes to open a laundry? Have you put together a business plan? Do you have the money to relocate to Flynt, Michigan or whatever economically depressed area you're considering? Are you going to be happy spending your days cleaning gum and feces out of washing machines and emptying the the lint trays in dryers?

Greenie

[forest beekeeper]

This local area is economically depressed.

I know two families [Scott / Jen, and Brad / Caitlin] who are both in businesses that compete with each other. I see these guys at market each week. To all outward appearances they invite competition. They like each other, they go to 'guild' meetings with each other and they compare each other's product. Brad / Caitlin just received a nationwide award for one of their products, at a national convention.

Neither of them wants to hire any more employees. In both cases, they both work fulltime in their businesses. They produce at nearly their full capacity, and would need to hire more employees before either of them could really expand. They both sell all of their product every week, they sell-out.

They both have apprentices live with them during the summers, to learn the business and to help increase production, but their apprentices leave in the fall, going back to college.

They are both members of a 'guild' where they share production techniques, compare product lines and pricing. I have been invited to join their guild.

They both have product prices set about as high as they can without pricing themselves out of business completely.

Their guild has began working with the state tourism board, and the tourism board wants to begin marketing online and out-of-state. But apparently everyone in their guild is making product at full capacity, and they all sell-out weekly, so none of them has any product left-over with which to market online or out-of-state. The tourism board has even offered them grant money, if only they would increase production somehow.

I have taken tours of the operations, the process is simple enough. Yet it requires focus and attention to detail.

One of them has asked me to join their guild and to start-up a new competing product line.

However at market each week, I sell-out too. Though my product is greatly different from theirs and is much less quantity. I am in the process of expanding my production line, but it takes time. I have to raise larger teams of producers for me.

At market, I do see other vendors who obviously have their own different types of product. And among them we have other product lines that we see could be developed, as there is 'demand'.

I know of two products that currently nobody in Northern Maine produces at all. And yet there are consumers asking for those products, just about every week. Southern Maine [Northern mass] has producers of these products, but nobody in Norther Maine.

The biggest demanded product that we have seen, we have been talking with state licensing and inspectors about, but we are still 'on-the-fence', and not sure if we really want to pursue. As it may turn out, further into the licensing process that we may not be able to get either of those licenses.

I do see possibility in Maine.

[NJ Chutzpah]

So what do you make: Pornography?

LOLZ just joking

smile everybody smile.

I would go to northern maine. You produce bee honey right. If you know a place were there NO COMPETITION, BUT THERE IS CONSUMERS it is always a good choice. You will probably never run into this scenario again. Might as well take advantage. If business does not go as planned, you can always find another Brad/Caitlin

[forest beekeeper]

Currently I do: honey, eggs, goat meat, gensing, and veggies.

I sell-out every week at market.

I have competition, though I do not see that this level of competition really effects my sales at all.

Anyone can go into Hannaford and buy eggs at a quarter of my prices, they will get non-fertile eggs with yellow yolks that are soft and runny. None of my eggs are like that. I just got a Blue ribbon at the Common Ground Fair for my eggs, the only blue ribbon handed out this year. My chickens are free-range in a forest, their eggs are fertile and brown with very hard shells, the yolks are deep orange and stiff. You have to really beat them to get the yolks to break. People who know eggs, try mine and the next week they are devoted customers.

However there are other product lines that are doing even better.

[Philip T]

Jumping back to the OP's question -- I think you are missing the point of what the Social Study folks call "fit in environment." Some types of businesses fit in depressed areas, some in low-income (not the same thing, btw), some for middle folks, some for high end.

And another point is areas in transition are a different breed of cat, yet.

Here are the basic rules ALL successful business MUST follow totally independent of the who, what, where, when and how much --

1. The customer must have money. People often think cash, but most any form will do -- even credit, debt, or trading animals/barter. (Capable)
2. The customer must be willing to part with that money for what you offering them. (Demand / desire)
3. You must be able to provide that product or service for less that what you are selling it. (profitable)

Sounds bone-head stupid, but it is astounding how many failed businesses failed to check that simple list.

But towards the application --

As a simple contrast between depressed and low-income (which is a relative term), consider the difference between a crashed mill-town, and the sustainable living areas of Maine described in this post. Whole different mindset and a whole different customer base.

Some businesses that do well in newly or recently failing areas --

1. Bankruptcy related services
2. Foreclosure related services
3. Moving supplies.

Some business that do well in depressed areas (generally economically predatory)

1. Check cash / Pawn Shop
2. (for some reason) cheap furniture
3. and the trifecta of economic stupidity -- Cigarettes, Beer and the Lottery.

Some businesses that do well in low income

1. Low cost medical service
2. Sustainable markets e.g., food.
3. Auto repair

To see the difference consider that the areas of Maine described above may not be economically robust, but they are not recently crashed, nor really depressed -- so the understanding of the customer base is entirely different.

But that is only the local numbers. If you do any sort of export -- product or services -- even to other areas of a city/region or state across economic "zones" there is money to be on that transistion -- e.g. poor folks from one side a large city/region going over the mow the lawns and rake leaves in the rich side. Works that way for other products and services as well. But you really have to some market studies to make sure you have hit the MUST have (capacity, demand, and profitable) model above.