When the economy goes down, many hard working individuals find themselves out of a job. You can go out and protest, or invest some time and creativity and start your own small business. Of course, some start-up businesses can also be much larger enterprises and involve multiple entrepreneurs. Whatever the scale, some basic rules for starting a new business always apply.

Tip #1: Understand Your Market

This should come as no surprise, but the only way to make money is if there is a large group of willing customers. It is not enough to simply open a shop and fill it with merchandise; enough people must come in and spend enough money every day to pay for the bills. While the process can seem very fickle, logic can eliminate a lot of trouble. Luxury items do not sell as well during a recession.

Tip #2: Take Advantage of Locations

Just as people will not buy expensive items when there is less work available, it is a bad idea to put a silver shop in a small town where there are fewer likely customers. It is instead worthwhile to rent a  space in an area traversed by more affluent customers. Premium shop space can cost the royal jewels, but it is worth access to the market.

Tip #3: It is Difficult to Compete With the Big Boys

Staple items sell very well in a recession, except large chain stores are almost always more cost efficient. It is possible to sell if a shop is in a convenient location, but it pays to have a specialized selection, such as a large assortment of fruit, flowers, or even cheese. Specialty shops have a solitary advantage over more generalized stores.

Tip #4: Try to Sample the Market

If the product is something you make yourself, or else some unusual import, try vending on the streets or at a fair before investing in a brick and mortar establishment. Testing the appeal of an item first is a great way to save money. Corporations spend millions of dollars a year on field research, although the average person can apply this strategy on a more basic level.

Tip #5: Do Not Put Too Much Faith In Advertising

It takes a lot of money to create demand for a new item. For a small business, focus on things already desired by consumers, although an added spin might give a business an edge. Advertising succeeds at raising awareness for a product or service; it seldom brainwashes consumers into a stampede. The average person tends to be shrewd.

There are no real short cuts in business, but there’s always ways to avoid some of the most common pitfalls. Be sure to check back often to see more tips for aspiring and current small business owners.