We’re learning what businesses suffer during a recession. Also good businesses to start in a bad economy. Here are three reasons why you can successfully open a business during recession…
If you want to start your business during recession, consider these three points.
Many remember well The Great Recession – Some saw much turbulence, others prospered. Many articles have been written on the resulting innovation, and also the companies that survived the recession of 2008.
You would get little argument by saying the current global pandemic has turned all of our lives upside down. And for those working toward the ultimate goal of starting a business, it can seem like all the hard work has been for nothing.
Some have predicted the world economy will slump into a long recession. As shockwaves of the coronavirus situation are felt, it would be madness to launch a start-up now, right?
Actually, it turns out that is not always the case.
While setting up a business during a recession may seem a risky move, can you start a business during recession? There are actually a lot of reasons why it makes perfect sense…
Customers Are Open To Change
There’s nothing like a complete and utter disruption to daily life to make people refocus on what they really want in life. This translates into products and services that they choose to buy.
People get comfortable dealing with brands and companies that they know. Tempting them to try something new can require a lot of marketing conversion activity.
During a recession, people re-evaluate, which presents an opportunity. Specifically, brands that can present a genuine altruistic or eco-friendly advantage may see a shift as consumers aim to do more good with their choices.
The Big Boys Are Vulnerable
In most sectors of business, a start-up is likely to go up against some well-established competitors with a known brand. They usually have deeper pockets for advertising compared to a small business working on a shoestring budget.
However, the agility that this lean way of working lends your company is precisely what might bring victory over the big brands in a crisis situation. While economic shocks occur, they are likely to be deeply felt by large companies with huge overheads and staffing bills.
This means that your major competition is in a more vulnerable position, which opens the door for you to position yourself to take some of the market. In turn, the perfect time to launch your social media campaigns.
Lower Cost Of Doing Business During Recession
One of the great advantages of launching during a recession is that almost everything you need will be cheaper. For single purchases such as:
- IT equipment
- Office items
- Website development services
you’re likely to be able to secure a better deal. So, prices are lower as other companies try to secure positions or move stock.
If you need to borrow money to finance your startup business, then the cost of lending is also lower. Interest rates have been at historic lows during the coronavirus pandemic in an effort to keep the economy moving. That is always a good time to borrow.
Some choose to find an angel investor. We recommend thoroughly researching that option. If you have low overheads such as an online-only business, you may be able to launch it with a 0% APR credit card or small loan. That gives you the breathing space to start marketing your business and potentially making a profit before any interest kicks in.