12 REASONS A RECESSION IS THE BEST TIME TO START A BUSINESS
Future generations will reflect on 2020 with a certain vocabulary. Among many words, at the top of its list ‘recession’ resides. If you had grand plans of starting a business this year, you may find yourself, head in hands, thinking, ‘this is the worst time in history to start a business.’ And yet, you couldn’t be more wrong. Here we list 12 reasons why NOW is the BEST time in history to start a business.
- Starting a business on the upside, rather than on the downside, is an advantage. The market WILL eventually go up again and I know I’d rather be on the uphill trajectory.
- Startups born in a recession create bullet-proof habits. In the same way that anyone can fall in love, anyone can start a business when the world is made of cupcakes and rainbows. Sustaining a business is the difficult part. So which businesses will survive? The ones whose foundations were built on roses or the ones who knew they HAD TO GET THEIR PLANNING RIGHT? You’d better believe it’s the latter.
- Successful industries become more defined. Last year, you probably couldn’t tell whether a business was doing well. Now? It’s Paint by Numbers – Joe Blow can differentiate the top-performing industries from those that a struggling. Take a walk down Business Lane (your local shopping strip) and it’s (literally) written on the wall. Additionally, if you think about where you are spending your own money right now, chances are, others are doing the same. Some industries actually prosper during difficult times. Get into one of those.
- Your competition is gone. Existing businesses are sadly closing their doors and budding entrepreneurs, who ordinarily head straight for external funding, are laying low. This is a great time for the Sara Blakelys of the world who can manage without capital funding and don’t want to hand over any equity.
- Your competition is all but gone. If your competition is still there, they aren’t spending where they should be. I was chatting with a friend of mine who owns a business and he is MESMERISED by the flood of leads coming in from Google Ads since the COVID-19 crisis hit. His competitors have switched off their ads, placing his business at the top of the search engine. Simply by staying in the game and doing nothing differently, his business has thrived.
- Money is cheap. If you need a business loan, the interest has never been lower.
- Problems become more obvious during a recession. This presents an opportunity for someone (you?) to solve them.
- Potential clients are shopping around. Other businesses will be trying to save money, so if you’re pitching to business clients, you may be able to access clients who are trying to save dollars.
- Hiring just got a heck of a lot easier. Talented people are looking for work. You now have the ability to hire someone who may be traditionally outside of your league who has the talent, experience and skill set to supercharge your business.
- If you do need capital, it’s more accessible than ever. Angel investors are spreading their wings beyond the stock market and looking to invest in small businesses.
- Your overheads will be reduced. With reduced prices for everything from supplies to office space (if you still think you need one of those) you’ll be able to reduce overall expenditure during a downturn.
- While the world is on pause, you are being handed the time to build a brand. The first year in business involves an immense amount of cold calling or brand awareness building. It takes tenacity and time, and a huge underlying PURPOSE to keep you going. It may take a whole year before you see your first sale. Under normal circumstances, that can be heavily frustrating and tiresome. Knowing you have to crawl before you walk helps you zoom out on this process. A recession will only heighten your appreciation for the crawling and it provides you with a higher degree of patience. Keep pushing your message out there, and when the world is ready to spend again, they will spend with you.
There’s a process that happens when starting a business; loads of research and planning to ensure it’s going to be a success. With or without a recession, that process needs to happen.
So, now it’s abundantly clear why a recession is a great time to start a business, how can you do it and do it well?
- Identify a gap. Solve a problem, offer something new, offer something old in a new business model, or provide a new price point. What’s your value proposition? For example, here at Navig8Biz our value proposition would be that we are providing REAL business education in an accessible way.
- Write a business plan. This is how you do it.
- Do your market research. What are your competitors doing and what’s your position in that space?
- Connect to your WHY. Why do you really want this product or service out there?
- Work out your margins. Can you make money from this product or service?
- Find your audience. Who are your people and where are they?
If it feels as though the odds are against you, that your plans for launching a business in 2020 have been thwarted by a looming recession; the truth is quite the opposite. If you are passionate about a product or service, you’ve created a business plan that shows no gaps and you’ve done your market research then, recession or no recession, it’s time to start your business.
This is your BEST CHANCE to finally make a go of it.
It stands to reason that while future historians will mark this year with the word recession, the best ones will label 2020 as the year of ‘Opportunity’, remembering the entrepreneurs who saw prosperity and hope when all seemed lost – the ones who changed the world instead of sitting around waiting for change to come. Will you be one of them?