We know what you’re thinking, but hear us before you completely turn down this idea. Some people see a recession as a restraint; some see it as an opportunity. Starting a business in any environment is challenging and tireless, requiring determination and proper planning–this only proves true during a recession; however, it is doable. Both Microsoft and Apple were founded during a recessionary period. So, keeping this in mind, here are some reasons you should consider starting up now.
One of the biggest concerns with starting a business is whether or not you have the money necessary to startup. However, this is the right time to find deals, especially for things that contribute to overhead prices. Whether you’re looking to spruce up your office space or find land for your business, take advantage of things being less expensive. In a down economy, used furniture, equipment, specific services, and even rent prices typically reflect market or below market value, putting you in a better position to negotiate input costs.
Most people start businesses in a strong economy because entrepreneurs aim for funding. During an economic downturn, people are less likely to startup, making competition less fierce. Additionally, companies that start when the economy is thriving may have difficulty adjusting in terms of where to cut prices or what aspects of the company they should invest in; these same companies may even be your competition. A startup formed during a recessionary period is purely designed for a low cost, making it a little easier to adjust to change than larger firms.
As mentioned earlier, some people see recession as a restraint or an opportunity. We see this as an opportunity for innovation. Consumers are always looking for businesses that can be nimble and problem-solve, specifically in unforeseeable circumstances. With more available time, startups have an opportunity to use this time to come up with ideas for innovation and can create new plans that can give them an edge over competitors.
Innovation also applies to hiring new talent. The economic downturn results in frequent layoffs, and highly skilled and talented employees are now looking for job opportunities. As they emerge, this may be an opportunity for you to build a strong team or hire subject matter experts that would mutually benefit your business and those looking for work.
Building loyalty goes hand-in-hand with innovation. If present clients see that you are dependable and nimble in the face of change, they are likelier to stick with you when the economy picks up again. For prospective clients, use this as an opportunity to undercut competitors. Knowing that people’s top priority is to save money during a recession, you can get creative with sales pitches that will bring new clients to consider your services.
When Will You Start?
Time is of the essence. The more time you have to plan out a business, the more likely you will succeed. Startups are built upon the foundation of motivation, commitment, and proper planning. Not only that but you will no longer be confined to the same routine. You can be your “own boss” and get creative with ways to keep your company afloat. Starting a business during an economic downturn gives you a slight advantage due to a lean business model, and you can focus on building a better experience for clients and customers.
Whether it’s fear, money, or time (or lack thereof), there will always be something holding you back from pursuing the idea of starting your own business. What is holding you back? If you don’t start now, when will you start? Do you have new business ideas you want to try out during this time? Let us know your thoughts in the comments.
2 responses to “Should I Start A Business In An Uncertain Economy?”
I suppose there’s no good or bad time to start a business. Years ago when I started my first one it was the worst time for the market – 2008 but it turned out to be a reasonable success…
I started the second one around 2017, great time as far as the market was concerned, not so much for the business 😁
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Very relatable. Scary to take the plunge, but always good to think the positive side of things when you first start out. Great insight, Vinay, and thanks for sharing that part of your business venture! 🙂
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