Is it Wise to Start a New Business Venture during a Recession?
Do you think itâs wise to start a brand new business venture during a recession? I have the passion to be successful, but Iâm not confident that starting a small business on my own, for the first time, is a wise decision given the current state of the economy. Thoughts?
Youâre wise to consider the macroeconomic situation before you set up a business. People are spending less, and credit is tight. But donât assume that all factors are working setting up a new business during a recession. There are a number of things to consider.
Respond to the recession. What products are people likely to need, considering high unemployment and dwindling retirement funds? Can you offer a low-cost alternative product by cutting costs - working from your home or marketing over the internet?
Prices are low. It may be the right time to buy capital goods and real estate. Moreover, talent is available because of the lay-offs weâve seen in the past year.
Your business will be operating in the future. What are the projections for the economy? When are you planning to start marketing? Whatâs expected to happen to your industry in the next five years?
Some industries thrive on recession â“ like discount retailers and firms that upgrade capital equipment. When times are lean, people look for low-cost luxury products, like candy and ice cream. Industries like health care, because of their nature, weather economic downturns well.
So be cautious, but remember that there are opportunities in the business world, even today.
- Steve Greechie, MBA