Throughout the 2008-2009 recession we have seen a rash of articles about why it’s a good time to start a business. Sometimes I feel those articles are more a matter of the writer trying to convince himself or herself that it’s a good time to start a business, than convince anyone else! After all, some people lose their jobs and then become unwilling entrepreneurs.
Still, it’s true that a recession can be a rare opportunity to start a business. One reason: competitors (especially large corporations) are distracted by their own market challenges.
That can be good for you if you are thinking of starting — or expanding — your business. It means others in the marketplace are not minding the store. It could provide just enough of an opening in the market to get a toehold to scale new heights.
Over at BigThink I have a guest post up about why a recession is a good time to start a business.
BigThink is a pretty interesting thought-leader blog. There are videos from people such as Thomas Cooley, the dean of New York University’s Stern School of Business, discussing opportunities during recessions.
Another highlight I’ll point you to is a video of Dan Doctoroff, President of Bloomberg financial news. He discusses how businesses, including small and midsize businesses, are capitalizing on the dynamic landscape of the current economy. He sees it as more of a cyclical economy with creative rebirth happening even in the midst of negative news — it’s pretty confidence inspiring.
I totally agree that big companies are distracted by the economic situation.
But at the same time, being small also gives startups a lot of advantages.
– In a small niche market, it doesn’t cost much to get noticed. It just takes time to participate in related site such as online forums, blogs, social networks…etc.
– Because startups are small, you can take care of your customers one by one with your heart. Who don’t like a few human touches these days? Think about what Zappos is doing these days and learn from them.
– If you product is good enough in a small niche market, your customers are going to buy even in this bad economy. I recently read from a blog talking about a few startups doing very well in this recession.
Build something people want and keep fighting for your dream.
I think you are right about the distraction and perhaps many larger companies are still primarily focused internally and not on their current customers. This creates unrest with customers that small businesses can exploit.
I agree that it could be a perfect timing to start a new business venture. I am involved in a new start-up that will roll-out in the near future. The idea is to spread positive messages through two-way communication by wearing clothing with an attention grabbing text.
On the same topic, I recommend you to listen to Wayne Hurlbert’s interview with author Scott McKain. His book, Collapse of Distinction: Stand out and move up while your competition fails, could be a good fit for your start-up business.
Big Think looks like an interesting site. I have to explore it more detail. I think I will start with:
“Ricky Gervais on becoming an atheist.”
“Gilbert discusses the nature of happiness and his work in affective forecasting,”
Thanks for pointing this article out, Anita. I’m gathering a little clipbox of these kinds of articles, I’m going to go back to them in a few years to show people once the economy picks up again. If nothing else, these articles provide entrepreneurs with the confidence they need to make the big leap.
Great post, Anita. I couldn’t agree more. I said the same thing about investment bankers, too:
Anita, I’ve found during my years in retail is that recessions tend to occur during periods of staleness. In fashion, for example, it’s the lack of compelling new looks. I’ve always felt this was a good way of looking at the economy as a whole; the lack of anything new, innovative and compelling led a lack of urgency and a sense of inertia that translated into stagnating sales, and downturn.
If you have a compelling, innovative idea (and you’d better; that the lifeblood of any startup), this is a great time to go into business. Everybody else is stuck in tired ideas and uninspired thinking.
There’s some good content at Big Think. I prefer watching videos to reading lengthy articles anyday. You’ve given me some interesting thoughts to consider.
There are countless of reasons why it’s a good time to start a Business during the Recession. The perfect Business to start is a Franchise as franchises continue to do well. Most have a proven track-record of success and this takes away a lot of risk. Visit http://www.redhotfranchises.com to see many opportunities available from nearly every industry.
Requesting information from each Franchise will give you a complete analysis of their financial conditions despite the Economic Crisis which will also be a good fundamental learning lesson
I am always asked if this is a “good” time to start a franchise business.
“It has to be a good time for you!”
The economy will cycle up or down, regardless of what we do as small business owners.
In the franchise world, the big mistakes are made when prospective franchise owners allow themselves to make their choices based on what is ‘hot,” as opposed to what makes sense for their skills, and their geographical area.
The Franchise King
Hi Vincent, you are right — in a small niche market it does not take much money to get noticed. It takes some time, but not a lot of out-of-pocket expense.
Hi Anita, thanks for your reply. While people may understand the benefits of being small and a startup in this economy, in my opinion, the most difficult part is really getting start. I mean doing the real works to start a company.
I have just read a very inspiring book talking about 3 young entrepreneurs giving up their well-paid jobs to start a company 10 years ago. Go to Amazon.co.uk and search for “A Book About Innocent”. Sorry the book is only selling in UK at this moment. Don’t want to put the link here coz this is not an advertising. But every entrepreneurs should read this book.
Jeff Machado | Your Outstanding VA
I really liked the comment above about a recession being at a time when things have gotten stale – that’s why I would say it’s definitely a great time to start a business if you really do have something new to offer. Or at least a new way of looking at something that’s been done.
The VA industry is growing leaps and bounds because when money was good, people felt comfortable just learning about doing business online and thinking “Wouldn’t that be nice?” but now that money is in the foreground and at the top of their minds, they’re thinking “Wow, I’ve spent all this money to learn but have nothing to show for it. If I hire a VA, I’ll actually have results now” which is a great change.
I like that people are getting smarter about what they’re investing in – not just promises but results.
It’s actually a very good time, both in the short run and the long run. Immediately, with the economy on the rebound, with people starting to spend more again, avenues for businesses are opening up. But even more broadly, this is the best time ever to be in business for yourself because there are simply so many amazing tools out there that can help you succeed — computers, software, website, mobile phones — it’s an amazing time to be an entrepreneur.