A lot of budding entrepreneurs are feeling pretty deflated right now, thinking that the coronavirus pandemic has put paid to their plans, but they should not be so downhearted because, although it might seem counterintuitive, an economic downturn can often be the perfect time to start a business. Here’s why:
People need innovative solutions
When times are tough, there are more problems than ever to be solved. Companies who can swoop in and offer solutions to whatever the pressing problem of any given downturn may be can often do very well out of it.
For example, any company that could come up with better solutions for tracking coronavirus could do very well out of it right now. If you have a great idea, you may not need to wait until things pick up because you launch your business.
Money-saving is on the agenda
If you’re a small startup, you may be able to operate with fewer staff and few expenses, which means you could be in an excellent position to beat the competitors on price.
In an economic downturn or recession where people are really counting the pennies, this could actually work in your favor. After all, people do still need to buy some stuff.
There are more jobseekers
Sadly, downturns always result in job losses. This is terrible for the people involved, but at the same time it could be good news for you, and maybe even them in the future.
Why? Because it means you are more likely to be able to hire great employees for your own venture. If work is scarce, a lot of skilled people will be happier to take the risk of joining a startup if it means they will have some money coming in.
Costs come down
Whether you’re looking for an office space to work from or parts to stock your online diesel spares business, in an economic downturn, you are likely to find that everything is cheaper, which means you will have fewer startup costs and lower initial overheads than you would have in normal times of prosperity.
This even applies to the amount of interest you will have to pay on credit cards and loans, so if you’re looking to start up a business on a shoestring, now could be the perfect time to think about doing that.
Less competition
Most entrepreneurs start their businesses when the economy is doing well, which means that there is always a lot of competition to fight off in good times.
When times are tough, only the renegades and rulebreakers take a chance and that combined with established businesses going bust makes for a far smaller amount of competition. This can only be a good thing for you.
Investors will listen
Intelligent investors know that investing in startups during downturns often plays out very well. The stock market is in a state and bigger businesses are having to make cuts, but newcomers, if they have their stuff together can come in and do great things, so investors are more willing to take the risk. This means it could be easier for you to get the funding you need.
Don’t give up. Be brave and build something brilliant!
- DISCLOSURE – This post has been written by an outside source
