Down Economy Business Advice
Starting a Business During a Recession
Written by Angela Ly for Gaebler Ventures
A recession can be a good time for you to start your business. Here we discuss some reasons why it's possible to ride out the storm.
Everyone is feeling the pressure from the economic downturn.
Those unemployed are finding it difficult to get back into the workforce, while those still employed are worried about further layoffs.
Shouldn't a recession be the worst time to start a whole new business? There are probably many questions circling around your head - how you would get funds, who would invest in your business, who would buy your products and services. All these and more are obviously harder to find definite answers to during bad times.
But a recession may just be the catalyst for new companies to be springing up. Many people yearn to have their own businesses, even while they enjoy a high-paying corporate job. They usually plan to work for many years to come in order to save up funds for their future ventures.
Forced to Strike Out
During boom times, these people feel safe in their corporate zones. Few are willing to let go of stable jobs in exchange for unpredictable ventures. Life is pretty comfortable, and it takes courage to quit that job in order to strike out in the big unknown.
However, getting laid off during a recession propels people to quickly plan for their future. With the stable job gone, and another one hard to come by, people start exploring their entrepreneurial ideas.
They also find that costs are lower. You could expect to pay less for rental, material supplies, and even salaries. Small ventures typically have higher flexibility in managing the company's finance, and thus find it easier to control costs than in large corporations. They are able to find creative ways to save. It's all about adapting your business to make it cost-effective.
Look out for forms of aid from government agencies. New businesses help to create jobs, and government agencies often have loans and other programs that offer support to startups.
Stick it Out
If new ventures are able to stick it out during bad times, then they are likely to have gained a strong footing in the market once the economy recovers. Naturally, the strategy of the business would need to be changed then, but we can all agree that entrepreneurs holding on to their ventures would breathe a sigh of relief when things start to look rosy again.
That said, it is still a huge challenge launching your new business during bad times. The point is that it is not that much easier doing so during favorable economic conditions, during which there is more competition. If you have a sound business plan that has taken into consideration the current market conditions, why not take the next step forward?
Angela is currently an MBA student at Nanyang Technological University in Singapore. Ms. Ly is looking to specialise in Finance, and has an interest in exploring topics in entrepreneurship and strategies for small businesses.
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