Starting up a new business is a bold move to make in the midst of an economic downturn. Get it right though, and you can reap the rewards despite the state of the economy. However, get your proposition wrong and you could be another casualty of a recession.

You need to have a strong business model and establish your values early on. As you become more aware of your competition it can become tempting to alter your proposition. Dare to be different and try not to forget why you set up your business in the first place.

Our business model is to sell our luxury watches directly to the customer over the web at a price that represents trade cost plus a small but fair margin and the reason we set up was to put quality timepieces within the reach of all consumers. Yes, we could jump on the bandwagon and opt for celebrity endorsement and expensive retail outlets, but our unique approach is exactly why we have a loyal customer base. So never forget why you set up and give yourself the time to become a success.

Have an understanding for what consumers want. You may have a great idea, but does the industry need your business and will it generate custom? The essential starting point for any business is researching your market: who are your competitors, what are their business models, what is not currently being done and is there a demand for it?

Indeed, up to now some businesses have done well from a 'me too' culture, but in our current economic climate, I doubt this will be enough to build a strong customer base and guarantee success.

Careful observation of consumer spend in an economic slow down provides a great opportunity for new businesses.
According to a recent study, online sales are expected to increase by 17% in 2008 despite a tough retail climate, and struggling economy. So whilst the high street flounders, why not move away from 'bricks and mortar' retailing and establish an online business?

Its popularity is undisputedly growing among consumers, it allows for overheads to be kept low and email marketing facilitates direct customer communication.

A good customer journey will also encourage loyalty. Your concept may be great but every customer touchpoint needs to be thought out to reinforce the customer experience. For example, we pride ourselves on excellent customer service and, no matter how time consuming it may be, I always have direct communication with my customers. This isn't appropriate for every business, but it is the personal touches and the excellent experience that will encourage repeat purchase.

So yes, the state of the economy creates a challenge for start up businesses, but a well researched business proposition that takes customer, competition and climate into account will be set for success.