Are you about to park your great idea to wait for better economic times to come around? You might change your mind in the next 3 minutes.
We explain how it could still be possible, profitable in fact, to launch your small business during a recession...
1. Solve a timely problem
We’re starting with an obvious one: if your product or service addresses a problem that’s arisen from the current climate, then your audience is primed for the solution you’re offering — the time is now!
2. Less competition
More people tend to start a new business in a flourishing economy. Yes, there may be some existing rivals who, if they survive the recession, you’ll need to compete with. But probably fewer than in prosperous times. Use your ‘new kid on the block’ status to your advantage — demonstrate through marketing how you are the innovative, cheaper, or friendlier alternative — to attract and keep customers.
3. Flexibility to work from home can attract great talent
COVID-19 has meant that many people are now accustomed to working from home and a better work-life balance. This flexibility is going to remain high up on the list of desirable employee benefits. You may be able to offer this benefit more easily than larger organisations and therefore attract and retain the best talent.
4. Lower overheads
A lack of job security means that people spend less. Subsequently, rents and other costs can go down as the market tries to encourage spending. This means you’re in a good position to negotiate prices and reduce your initial set-up costs. Also, keep an eye out for businesses that are closing and selling their supplies cheaply.
5. Be the first to innovate
Many companies try to cut costs during a recession and put a hold on innovation. Because you’re going to be starting from scratch, you can build new technologies or learnings into your product or service. First impressions count so be sure to highlight these points of difference in any marketing that you run.
Keep in mind that it can be harder to secure financing during a recession. A solid business plan is going to be vital, so do your research. Good luck!
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