We’ve all been experiencing challenging times of late and it seems likely that economically, we’re in for a rough few years to come. Instinctively, we might be thinking about taking fewer risks, hunkering down professionally and riding out the storm but here are a few reasons for doing the exact opposite. Reasons why a recession is actually a good time to start a business.
Downturn or Opportunity?
Recession is bleak without a doubt, but with economic turmoil comes opportunity. Most successful businesses solve problems and a recession creates a whole lot of those. At present for example, people are struggling with the challenge of working from home, of homeschooling, of requiring deliveries and ways of staying in touch with family and friends.
People are travelling less, consuming media differently, engaging with work and society in new ways. We have seen endless challenges and problems in this year alone. Consumers are looking for innovation and solutions to their problems. Your start up could be the one to offer those.
The Coast is Clear
Very unfortunately, many companies are forced out of business during a recession. And in the main, fewer start-ups are launched since there is commonly less confidence in new ventures. That adds up to a distinctly lower amount of competition in almost every industry. For start-ups, that is a good position to be in. The coast is clear for you to launch your product, to offer your solution, to carve out your path to market. There are niches left open, and there are new opportunities that have not yet been pounced on by bigger companies. Small businesses can be agile in ways that bigger companies cannot so when markets change, or customer needs evolve, you can be the one to
answer the problems.
Find Your Dream Team
In periods of economic pressure, redundancies are high and the employment market is often saturated. This bodes well for your start up. In boom markets, finding the right team can be almost impossible for small businesses. They’re competing with huge companies who have even bigger budgets and great candidates choosing their options can drive up salary expectations and encourage job hopping in a way that doesn’t happen in a recession. Add to that the fact that the world is working from home and suddenly you have an international recruitment market at your fingertips. You can you choose from a team wherever they are and this broad scope might mean your budget goes further and you can gather the best candidates for the job.
Less To Lose
Perhaps you have been looking for a job or you have been made redundant recently. Starting a business might the answer. With fewer firms recruiting, this could be the time to go out on your own or set up a small business. Bigger firms are being more cautious, with hiring freezes and less expansion, this opens the door for small companies to act. For new businesses to take market share, for start-ups to build their brands. Starting small also means you’re able to offer greater value. Large companies by definition need to make large profits to survive. As a small business, you are leaner, you can be more flexible, you have smaller overheads and can offer products and services at a lower rate.
Give the People What They Want
Huge numbers of people are keen to support small business these days. We see our high streets changing with only large multinationals able to sustain, so we’re on the lookout for the small business hero to get behind. Plus we all want solutions. Locally, affordably, and in good conscience.
We are actively looking for innovation and for ideas to make our complicated life easier. Small businesses are uniquely placed to meet that need. To pivot their offering and to bring new ideas to market.
Just Look to History
You don’t need to look far to find countless business success stories that were founded during an economic downturn. In fact according to a 2009 study by Ewing Marion Kauffman Foundation, around 57% of Fortune 500 Companies were actually launched during a recession. Pretty compelling figures. Uber and AirBnB to name just a couple were launched during the last economic crash and have grown into hugely successful enterprises. Both launched on a problem solving platform, they provided answers to the question of ‘how to make more money’ and ‘how to spend less on travel’. They did it simply and efficiently as only a small start-up can do.
So while 2020 onwards may be a time of great economic challenge, it is also going to be a time where innovation will be at the fore. Where smart small businesses take the opportunity to provide solutions. Where new paths to customers are forged and where we witness the launch of business successes of the future.
Whatever your business idea, whether it’s just something you’ve been mulling over or whether you’ve taken some steps on the entrepreneurial path already, we’d love to help. Read some of our Go For It Success Stories
and get in touch. Our business experts will be delighted to hear from you and to talk you through everything you might need to know to move forward with your business concept.