Recessions are hard times. People lose their jobs, companies get wound up, and the lucky ones take the losses from their cash reserves. But it’s not all bleak. Startups, with their inherent agility, can take advantage of a weaker economy and come out on top. From day one startups operate an inherently lean business model, while maximizing value for customers. While economic uncertainty is never a desirable situation, some of the world’s greatest businesses have started during a downturn or recession. For all the pain and hardships recessions cause, they also create unique opportunities for savvy entrepreneurs in general and certain types of businesses in particular.
What this means for entrepreneurs is that there’s no better time to get going now and start chasing your company dreams — in expectation of the next growth phase.
Here are some of the reasons why you should start your company now — given the current economic downturns:
Everything is available at a cheaper price: –
There’s a great deal of value right now in this and in the world markets. This is the right time to make fantastic deals in virtually every category, from land and equipment to commercial office space, personnel, and labor. As asset prices have been brought to its knees, there is no better time to get into real estate or financial markets, or even heavy equipment and construction. Some people have waited years to find value in this markets-and now the time has come.
Low-interest rates, cheaper the credit:
During a recession not only do things cost less, the central banks of the recession affected countries gradually begin to lower interest rates to keep consumer spending high. This means that in its early days, loans and particularly credit cards can make more sense for your business, compared to the high-interest rates used to manage inflation when the market is strong.
No tension of pressure and expectation:
The fear of failure is a common hurdle for starting a business. Entrepreneurs are often criticized by friends or family to pursue something more practical like some kind of ‘guaranteed’ fulfilling career than a business they dream of launching. Those who neglect the criticism and start one, in any case, expose themselves to great public criticism. And that’s why a recession is really the ideal time to make a move on your own.
What’s more, it’s less uncommon if you fail because, after all, the economy is still down. Put another way, recessions can actually flatten the severe bubble of pressure and expectations that entrepreneurs will find themselves in a prosperous time.
Identify a Need, Provide alternative: –
The situation is such that people are in search of alternative factors that will help them in saving money during this economic time. This is an ideal time to come up with a product and services that will help them in satisfying their needs. All we need to do is identify the opportunity and come up with business ideas to help people satisfy their needs.
Savvy investors are ready to invest: –
For any small business or big companies, there is an unavoidable cost that needs to be spent— like the plant and equipment costs that can’t be avoided. Now during such economic time recessions create plenty of determined investors who are looking for creative business plans or new business opportunities in which they can invest in which will turn out to be a successful business over time. When the economy crashes and burns, angel investors, in particular, are looking to move their money out of the stock market and may be willing to fund you if your prospects are promising.
Also, more importantly, a startup or a business that has been set up during the times of recession has more capability of working with minimum costs and optimum resources making it more attractive for the big investors to invest their money into.
You’ve lost your job, and you have to do something: –
This is the most motivating factor of all to start a new business as it is a do or die situation for a person. Also sometimes, the best business decision is the one you are forced into. There’s nothing really wrong with being in that situation; it simply means there is more urgency to do something that will start to generate income as quickly as possible.
Here are all the reasons to start your business in a recession. After all, the odds are on your side that the expansion will be much more robust than the current slowdown.
Always remember this one thing: There’s really no great time to start than that of the now, particularly when people around you are more relaxed with their own list of excuses for not starting to follow their own business dreams right now. It just means that you’re going to face a lot less competition.
During a downturn, there are plenty of reasons to start a company and plenty of business models that are considered recession-proof. If you have the strength and determination to make this happen, a decline is a perfect time to shed the life of the corporate puppet and go to work on your own and become a business owner rather than just an employee.