What can you offer?
First, not every sector is poised for new growth. For example, starting an upscale restaurant or high-fashion boutique is probably a bad idea now. But there are growing sectors. "Try making a product or solving a problem specifically for a generation like the boomers or the millennials," Cosper says. Other emerging areas are green energy, video games, fitness and health.

For many, though, it's better to stick with an area they already know. "Now is the time to leverage your knowledge. It's not the time to learn an area you know nothing about. You must have work experience in that industry and know who the suppliers and customers are," Hess says.

That's how Michael Nusimow, a former software engineer for Bloomberg News in New York, started his company. He kept missing his dentist appointments and wondered why his dentist failed to remind him. He checked the dentist's software system and found it "truly awful." But a light bulb went off and in January, he resigned and started DrChrono.com, which creates Web-based tools for doctors to manage appointments and billing.

"People thought I was crazy, but I had the passion to run my own business," says Nusimow. "Also, the software idea was relevant and ... could have a big impact."

Also important to Hess is what he calls the value proposition. "You need to decide why someone is going to buy what you have to sell. You must have a message to customers about why you'll be better, faster or cheaper than the competition," Hess says.

It's easy to do research online, but what will give you a competitive advantage is talking to potential customers, suppliers and vendors directly, says Volchek. For Higher One's banking products, he went to university administrators and asked them about their problems and procedures.

Once you've got the idea, create a business plan. Two pitfalls of writing a plan are overestimating sales and underestimating expenses. Nothing could be worse in a recession. "We tell FastTrac students that it takes twice as long to break even than they think, so they should basically multiply their startup costs by two," Doss says.

Where's the money coming from?
To be sure, insufficient capital is the reason why most companies fail. Startups with $50,000 or more in capital have a better chance of keeping their doors open than those that don't, the SBA says.

Formerly free-spending venture capital firms are tight-fisted these days. If they are investing, their money is going toward software and medical devices and less into other businesses. Instead of raising $3.5 million from venture firms, Volchek and his partners started instead with $600,000 from friends and family.

"Raising money that way makes you more disciplined and resilient financially," he says.

Volchek recommends raising small amounts from individual investors, so the risk is spread among many people. That will make them more willing to invest. Offer them stock in exchange.