Intuitively, a recession might seem an awful time to think about starting up your own business. However, this isn’t true. Many highly successful companies had their start in some of the worst recessions because they recognized the opportunities such economic situations offer.
We’re going to look through a few ideas that show why starting your own business during an economic downturn can be advantageous. If you think smart and think creatively, an economic downturn is no reason to block your ambitions for starting your own business. The tips below detail some of the reasons a recession can play to your advantage.
1. Lower start-up costs. It can often be cheaper to launch a business during a recession rather than during a boom. Businesses will need customers and will be prepared to offer significant discounts on many things that you will need, such as advertising, services, inventory, or supplies.
2. Advertise your way to success. Advertising is nearly always cheaper during a recession, and you might find that your competitors have neglected it. Maybe they won’t have the budget for advertising anymore, or they might assume that nobody else will be coming into the market during a recession. This means that their customer base is vulnerable to switching over to you.
3. Offer the best customer service. Customer service is essential for any business to succeed; people want the right treatment and will always go where they feel they will get it. In recessions, your competitors may have to reduce their customer service offer for economic reasons. This creates a gap in the market you can fill by supplying the very best service.
4. Offer your customers bonuses. In a recession, people are more likely to pay serious attention to businesses that give more significant offers. You can stand out in the market by opening your new business with eye-catching offers.
5. Get the best workers. Sadly, recessions inevitably mean that some outstanding and highly qualified workers will be laid off. However, this does mean that you will have your pick of an excellent workforce, whose loyalty and gratitude at finding work in hard times will offer you significant advantages.
6. Getting ahead of the game. Many businesses think that they should wait for a recession to end to launch at the optimal time. However, if you start your business during a recession, you will be far better placed to take advantage of increased consumer spending when the recession ends. You’ll already have an established market presence, and they’ll be playing catch up with you.
7. Be economical. Businesses need to make savings wherever they can at any time, but especially during a recession. Frugality is your friend: always search for efficiencies, savings, and bargains. If you get into this habit because you started up your business during a recession, it will stand you in good stead in the good times as well.
By following the tips above, you will be well on your way to establishing a profitable business, even during a recession. And imagine, if you can develop and run a profitable business in times of recession, how well will you do when the economy heads upwards again? All economists know that the economy inevitably goes in cycles; if you catch the economy at the bottom, there are considerable savings to be made in terms of acquiring stock, resources, and personnel, savings that won’t be available to any competitors who wait for what they think is a more favorable time to launch.
Seize the day!