“The only thing worse than starting something and failing… is not starting something.” -Seth Godin
Reading the title, the first thought you might have would be- It is impossible to start a business during an economic downturn.
A study shows that more than 50% of Fortune 500 companies started either in a bear market or a full economic downturn.
Yes, it’s true that a slow economy might affect your entrepreneurial journey as customers are less likely to spend money when they are worried about their bank accounts.
That being said, the economic downturn offers you the opportunity to identify gaps in the market and find unique opportunities that are more difficult to see when the economy is growing.
Still don’t believe it? Ok, let’s stop and take a look at some of the massive businesses around today that started during a recession period.
Year Launched: 2008
Zendesk was co-founded by three friends, Morten, Alex, and Mikkel which was started during the recession period of 2008. They saw huge opportunities in the existing complex, expensive and hard to set up It and ticket software system. A new generation customer help desk software, Zendesk is built.
Year Launched: 1975
A new computer software business, Microsoft was launched just a few days after the economic stagnation of the 1973-1975 recession. In 1986, a decade later, it launched an Initial Public Offering (IPO) and experienced a subsequent rise in its shared price which created 3 billionaires and almost 12,000 millionaires. The company grew to become the most successful company of all time.
Year Launched: 1971
The idea behind founding FedEx came during a school project where Fred Smith worked on building fast, efficient, reliable door-to-door cargo delivery. Fred faced many challenges to launch the company after the recession period of 1969-1970, but he overcame those and made this successful delivery company which delivered over 6 million packages a day in 2019.
There are other companies like General Electronics, General Motors, IBM, Disney, HP, Hyatt, Trader Joe’s, Electronic Arts and many more that started during a recession or economic downturn.
Now you have proof it can be done, let’s look at some of the reasons why now, during the COVID – 19 economic downturn, is a good time to pursue your dream and start a business of your own.
You have got plenty of time
Due to this coronavirus pandemic, most of the countries are on lockdown and you have quarantined yourself at home. Whether you are working from home or not, you have got plenty of time compared to earlier. You can build skills required to start a business, read books, invest in good online courses. This is the time to invest in your self-development in order to make the time more productive. Plus it will relieve you from stress or anxiety caused due to what is happening in the world.
Availability of more qualified professionals>
Yes, the world’s economy is slowly going down and there are some freelancers and professionals who are struggling to find work. It is the best time to find and hire better-qualified professionals from around the globe. If you are in the United States, you can look for people in India or the Philippines where you can find professionals at a very reasonable price which is also great money for them. So, you will be creating a win-win situation here.
Yes, there will be less competition because most of the aspiring entrepreneurs out there who were ready to launch their business, might feel skeptical about it now. They might be waiting for this situation to get over, the world economy to get better. You have to take the chance, use the opportunity and get yourself out in the market.
Easy to create Brand Awareness
Sitting at home all the time in isolation has left people feeling very bored. Most of them are using social media all day, you have a better opportunity than ever before to engage with them online and get your brand notice. Do this by creating Facebook ads, creating Instagram, Facebook, TikTok posts regularly and creating awareness about your business. This way, even if you are launching after a few months, people will already know about you and there is a chance you have built your customer base by then.
High possibility of getting investors
Stock markets are going down. Your friends and family might be hesitant about investing in the stock right now. You can pitch your idea and convince them to invest in your business. If you have a solid business plan that they can trust, then there is a great chance to get investors within your friend or family circle.
Negotiation can go in your favor
When the economy is weak, traditional vendors find it difficult to sell their products. This can go in your favor as their options will be more limited during this time, making more willing to accept your terms and find a deal that benefits both the parties.
The decision is always yours, whether you want to take the risk or you just wait for the right time to come. Starting something on your own will always be unpredictable, having failures. But, you should be smart enough to identify the opportunity and hit it.
You can find plenty of reasons to start your own business during the recession and also find business ideas that are recession-proof. However, the most important thing you are going to need is a positive mindset and the ability to commit to self-development. If you have got the right guidance and the motivation to make it happen, it will – and the economic downturn is a great time for it!