With a pandemic affecting all corners of the world, the economy in many countries has entered a period of recession.
With the unemployment rate skyrocketing, people are looking for ways to continue to support themselves in this global health crisis.
Also, with the potential threat of being unemployed the thought ‘should I start my own business?’ has crossed the minds of many.
The short answer to that question would be a simple yes, yes you should. This may seem not very reasonable, considering the economic downturn.
Still, just like the old saying ‘every cloud has a silver lining,’ it is during economic downturns that the opportunity to develop and build a new business becomes it’s most prominent.
With this in mind and resources such as the Latest retail and wholesale trade in Australia released by the ABS, it becomes more apparent as the type of business you want to start.
Why should I start a business during a recession?
There are many benefits to starting a business during a recession.
First of all, things are way cheaper at the moment. Because of the economy experiencing a downturn, many businesses are putting most of their goods and services up for discounts to help encourage their customers to continue purchasing from them.
This means you can get everything you need to start your business at a lower cost. It is also at this time that you’re able to find other services to help you start your business. Some service providers are offering discounted website and logo designs.
It’s also during challenging times like these that people are also experiencing different difficulties that have not been so prominent before, some of these adversities can have anything to do with social distancing rules, challenges of working from home, mental health strains and other economic pressures, with these in mind many people are looking for anything to help solve their problems.
Actually, because of this, there is an increased demand for wellness, medical, Esports, technology, fitness and other delivery businesses.
Because of the challenging and uncertain times, there may be less competition for your new business should you choose to start one.
Some insolvent companies are closed or will (unfortunately) fail, and many people who would have otherwise started a business will not be able to. As a result, if you can create a business now, there’s a good chance you will have less competition.
Where to begin
Because of a troubled economy, most would assume it’s not a good idea to begin a business.
This means there is less competition for you in the long run. At the same time as well some already established companies are closed due to lockdown laws or unfortunate as it is unable to open again and retrospectively shut down because of it.
Since this is the case, starting your business now will mean you won’t need to worry about high amounts of competition and can get a solid foothold to the start of a successful business.
At the moment as well, there is a real surge in support for small businesses from non- profit organisations to government assistance. In NSW, the government is currently offering small businesses one-off grants of up to $3000.
Some sites, like OpenWeStand.org, lists resources from more prominent companies, that are being offered to help small businesses. Crowdfunding is also a popular way to gain financial support for your business.
Popular platforms like GoFundMe has a small business relief fund to help small businesses that are being impacted by the global health crisis.
This, with other platforms like Kickstarter, indicates that there is strong support out there for small businesses over the world.
Obviously, since the economic downturn interests rate are going to be at low levels.
Taking out a loan can be a quick way to fund your new business and get everything for operations to begin. In particular, for a new business, small loan providers are good options to take for small businesses outside of government loan programs.
Once again, because of the recession, many people have also, unfortunately, lost their jobs. Because of this hiring at this time will help you find many talented individuals who are willing to work hard for you.
Since we are in a pandemic, the only way you can start a business is from home. This is how most small businesses get started anyway, creating a website with a designed logo and buying the domain name is all done online and now has been made easier and is cheap to do so.
Companies that began during a recession
A good piece of advice to take when you begin the process of building your business is to take inspiration from successful innovators.
Apple is an excellent example of this; the company was launched amid a recession. Steve Jobs constructed computers and sold them in his garage before his business took off.
Now being known as a significant tech company today, all this may not have been possible if they didn’t launch during that crisis.
Apple isn’t the only large corporate company that has been able to do this.
There have been many well-known brands that began their business amid the economic depression.
Some other examples include:
- Disney- The brothers Walt and Roy Disney started their career through the Mickey Mouse Steamboat Willey; it was a year later in 1929 that they both incorporated Walt Disney Productions right before the 4-year Great depression began. Because of this economic downturn, their business was needed now more than ever. With the increased need for people to have a distraction to turn too, Walt Disney Pictures was able to grow their business to the point of having the ability to work on a full-length feature film by the end of the depression.
- HP: This is a worldwide powerhouse in computers and electronics. This company began when graduates Willian Hewlett and David Packard incorporated their business on the 1st of January 1939, during the time America was still feeling the sting of the recession.
- Microsoft: It was in 1973 that an oil crisis, alongside a stock market crash, hit the GDP worse than it has in the last 20 years. However, Bill Gates and Paul Allen still began developing there software business Microsoft, which finally came out in 1975, just days after the recession was officially over, within a decade the business grew and launched an IPO that created 3 billionaires and 15 millionaires.
These are just some of the many well-known corporate giants that owe their success to take the risk and establishing themselves in the middle of an economic crisis.
Building a business won’t be easy, nothing significant ever is. But like these iconic brands have already proven sometimes you have to take that risk to see results, like they always say you lose every opportunity you don’t take.
You want to get your business started? Need guidance on the best way to move forward with marketing and promoting your business then contact us to see how we can help you achieve your business goals, avoid costly mistakes and increase your chance of success.