Recessions and blips in any economy are a fact of life, but should that stop small businesses and entrepreneurs from creating the next big thing?
Without a doubt, starting out on your own can be daunting, even in a healthy financial climate, but some businesses and services actually thrive, during times of austerity.
Do your research and homework, take advice, and seek support and perhaps your business could be a recession success story!
As a starting point, sit down and really think about two things. Firstly, the service that you are offering and providing, and secondly, who your customers are. Realistically, is the service that you are offering likely to be needed and used regardless of the economic picture-if it is then don’t rule out getting started. If you have established that your business is valid, then will your customers be able to afford to use you? A recession can hit certain demographics more than others, so if your customer base is likely to be impacted negatively, then perhaps hang fire, and stick to the day job, save, and plan.
What you need to get started in a recession is a service that is going to be used and a customer base that can pay for it. If you have both then you really can consider moving forward if you don’t, perhaps you need to take a pause or adapt your business and the services that you offer.
Think about the services that you used and relied upon during the pandemic and Brexit recession -Amazon, Groupon, PC World, online gardening providers, baked goods and services, even hatch your own butterflies-the list is extensive. Can you offer your customers a bit of hope, joy, or interest during future hard times?
OK. Say you are lucky enough to have a viable business plan and customer base-what next?
Now you need to think about your start-up costs. Do you have enough capital to get up and running? If you do-fantastic. If you don’t then take some time to do the sums. A recession means high-interest rates on loans and borrowing, so if you need a helping hand, please bear in mind that you might find it harder to borrow as much as you need AND that it will cost you far more in interest than ever before. It could be worth thinking about alternatives to bank borrowing too. Crowdfunding, community start-ups, and private investors are sources of income that are likely to give you a chance when the banks can’t.
Another consideration that should be taken into account is that while a business can be successful and grow in a recession, the point at which you break even and then turn a profit can take considerably longer. Are you able to hold off on drawing a salary if this is the case?
At the end of the long working day starting a business at any time is hard work, risk and expensive. However, if you have got the time, determination, and the right kind of business then a recession does not need to get in your way!
