Starting a business during a recession can be a great way to get ahead of the competition. There are several advantages to starting a business during a recession, including:
1. Problems become opportunity
There are problems that need solving and people are looking for innovation. Problems with the supply chain, for example, are often the impetus for businesses to succeed. But it provides an opportunity for entrepreneurs who are scrappy problem solvers to start manufacturing closer to their customers.
2. Lower startup costs
When businesses are struggling, they often offer lower prices for office space, equipment, and other necessary start-up costs. If you are patient enough to look for great bargains, this can give your business an opportunity to start off with less capital than you would otherwise need.
3. More time to focus on the business
During a recession, people may have more time on their hands as they are laid off or have their hours reduced. This can give you the opportunity to really focus on your business and get it off the ground.
4. More motivated employees
During a recession, there are often more talented employees available as people are laid off from other businesses. These employees may be more motivated to work for your startup because they may be more willing to take risks on projects that are not as stable but full of potential. Employees that have been burned by working for large employers may be motivated to "stick it to the man".
5. Increased customer spending
As people lose their jobs, they often look for ways to save money. This can actually lead to increased spending on certain items, such as entertainment and experiences, that provide value for money. This can be an opportunity for businesses that offer these types of products or services.
Conclusion
Of course, starting a business during a recession comes with its own challenges. But if you are prepared and have a solid amount of cash saved up, it can be a great time to start a business. Do your research and talk to other entrepreneurs who have started businesses during a recession to learn more about the challenges and opportunities you may face. If you or your business needs help planning for the upcoming recession, Global Finance Teams is here to help! Contact us today to learn more about how we can help you.