During recessions, there are plenty of business models and reasons to start a new business. A downturn is a good time to shed the regular commuter life and go to work for yourself only if you have got the tenacity and motivation to make it happen. Start-ups usually inherently lean business model from day one by maximizing value for customers.
Some of the world’s greatest businesses have been started during a downturn or recession even if economic uncertainty isn’t the desired situation. According to the survey, start-ups are usually America’s greatest employers as they rule to become big corporations in their own right.
Just look at the number of employees at Facebook, HP, Google, and Apple, etc.
I. Dedicated and hard-working people want to work
If you want to grow your business or secure your fundings you priory have to increase the numbers of employees. But finding the true and hardworking staff is merely not an easy task. Highly qualified, effective, and talented individuals are found much easier during recession times rather than normal times.
II. People want to save bucks
You should be able to undercut your competitor as a lithe start-up with minor expenses. It’s a perfect time to make a sales pitch and win over the clients who will be watching their wallets and will be in search of cheaper alternates. You’ll keep those clients when the economy recovers so do a good job.
III. People want modernization
The problem occurs during the recession. When innovations are down they slow investments. Solutions to the problems are looked at by consumers and businesses that present opportunities for start-ups are being solved.
IV. Executives are susceptible
Your competition is in a susceptible state whether it’s a giant corporate looking to scale back and hide through a downturn or smaller companies that might not have the flexibility to see the storm.
V. Things are cheaper
The businesses that are sickly and selling off certain assets are weak economic growth. The things that cost less put simpler. To bull off the stock; your typical overhead costs such as a one-off purchase or office space- its furniture, tends to have a lower base price, and vendors have discount prices.
VI. There will be fewer competitors
Every man along with his dog wants to start up when the economy is strong. Many of these promising entrepreneurs go straight for funding and eventually crush the reboot. As there is less funding, fewer people try to make a start-up during a recession. Those who want to control ownership in the company and don’t want to spill the beans with the bankrollers; are easy for a keen bootstrapper.
VII. A lean startup is been built by good habits
A startup that is built during tough times is established from the roots to be a lean, mean, and efficient machine whether you have launched or no. Since you will be able to lift prices once consumers and clients are spending again those habits should stay with you when the market recovers by giving you high-profit limits. If you can grow a business in the case when the consumers’ confidence is low for investment and businesses are tightening their belts; your business will be bulletproof when things will improve.
VIII. Negotiating powers are given to start-ups during the recession
When the economy is weak and traditional vendors have trouble in moving products. A recession is a great time to negotiate if your company depends on products from suppliers to negotiate or renegotiate a deal that will benefit you even after the downturn ends. A start-up is just another startup when an economy is strong and the vendors set the rules.
IX. Cheaper credit is during low-interest rates
To keep the consumer’s spend high, the central bank of affected countries generally starts to drop interest rates not only to do things that cost less. In the early days, loans and specifically credit cards make more sense for your business compared to the high-interest rate that is used to control inflation when the market is strong.
X. Investments are made by smart investors
There are plenty of determined investors who are looking for new business opportunities if you need funding but the plants and equipment’s cost can be avoided. When the economy is at fault and specifically the angel investors are looking to move their money out of the stock market and are willing to fund you if your predictions are promising.