Ep:14 5 Tips on Why Starting a Business During a Recession is a Winning Move

 The economic uncertainty can be daunting, and it's normal to question whether starting a business in such an environment is a wise decision. However, it's essential to view the situation from a different perspective and consider the unique opportunities that a recession may offer. 

 While a recession presents risks and difficulties, it also offers several advantages for aspiring entrepreneurs who are willing to adapt, be resourceful, and seize opportunities that will enable them to start a business and turn economic challenges into a winning move and an entrepreneurial success story. 

 In today’s podcast, we’ll be diving into why launching a start-up during a recession might be your golden ticket to success as well as hidden opportunities and advantages that you can leverage. Plus, I’ll throw in some actionable tips and tricks, real-life examples and use cases to help you navigate these tricky waters and set your business up for long-term success. 

Transcript

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The economic uncertainty can be in downtown, and it's normal to question whether starting a business in such an environment is a wise decision. However, it's essential to view the situation from a different perspective and consider the unique opportunities that a recession may offer. While a recession presents risks and difficulties, it's also offers several advantages for aspiring entrepreneurs who are willing to adapt, be resourceful, and seize opportunities that will enable them to start a business and turn economic challenges in a winning move and an entrepreneurial success story. In today's podcast, we'll be diving into why launching a startup during a recession might be your golden ticket to success, as well as hidden opportunities and advantages that you can. Plus I'll throw in some actionable tips and tricks, real life examples, and use cases to help you navigate these tricky waters as you set your business up for long-term success. Hi, and welcome to the Brave Pivot Podcast. I'm your host, Cindy Marie Ferguson. I'm a former corporate girl turned entrepreneur, business educator, and mentor here to help you build a profitable and successful business. After the kids' corporate and chaos. On the podcast, we'll have honesty, meaningful conversations around becoming an entrepreneur, starting a business, building a brand, and my favorite. Systems and processes and so much more. If this sounds like your thing, stick around each Wednesday through guest interviews and solo episodes. I'll be providing insights, tools, business strategies, and actionable support to help you along the way on your entrepreneurial journey. Get ready for some candid conversations, inspirations and invaluable insights. I'm so delighted you're. Let's dive in and get started. Welcome back to The Brave Pivot Podcast. Today we'll be diving into why starting a business during the recession is a winning move, and I'll be providing five tips to help you on your entrepreneurial journey. But before we get started on that, let's back up a bit and start under with an understanding of what exactly is a recession. So here's the definition of a recession. A recession is the period of negative economic growth that lasts for at least two months, consecutive quarters, or six. It's cataract, the definition of a recession. A recession is a period of negative economic growth that lasts for at least two consecutive quarters or six months. It's characterized by decline in economic activity, increased unemployment, reduced consumer spending, and a general slowdown in business.

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Recessions are a natural part of the economic SEC cycle and

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can be triggered by various factors such as financial crisis, external shocks, or imbalances in the economy. Now it's

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normal for aspiring entrepreneurs

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and small business owners to feel somewhat reluctant when thinking

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about starting a business during. Starting a business during a

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recession can be risky. However, recessions can also be the perfect time to

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kickstart the dream, the dream business of

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yours, and there are benefits for doing so. So let's take some time to quickly review them, and I'll provide more context later in the podcast starting with the first benefit. Lower startup costs and operating costs. That's followed by access to a highly skilled and experienced talent pool at a lower cost. Then by reduced competition, allowing for easier market entry and growth. And the next benefit is the opportunity to build a lean and efficient operation from the ground up. And the last benefit is the potential for rapid growth as the economy recovers and rebounds. Now, now that I presented the benefits, I'm gonna go over the risks to present a more balanced perspective. And this might help you when it comes time for you to make an informed decision, should you start a business. Starting with the first risk. It's economic uncertainty and it can, of course, it can make it difficult for secure funding or financing. The next risk is consumer spending may be lowered during a recession impacting revenue. The third risk is the potential for a prolonged recession, which could strain your business', finances, and growth prospects. And the next risk is market conditions may change quickly, requiring your business to adapt rapidly to survive. And the last risk is uncertainty about the timing and strength of an economic recovery, which of course may impact your business planning. Now that I've given you a balanced perspective with both the benefits and the risk, now it's time for me to share my five tips why starting

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a business during recession is a winning move. Starting with the first tip, you can bag a bargain

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and you can save on startup

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cost. When there's an economic downturn, you'll find that

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landlords and suppliers

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are more willing to strike a deal to keep their businesses afloat. This means you can negotiate great deals and bargains on rent, supplies and equipment. Let me give you a real life

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example. During the 2008 recession, many small businesses owners were able to

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secure prime retail

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locations at a significantly reduced

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rents, which in turn gave them competitive advantages in the market. And here's a pro tip.

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Keep an eye out for commercial real estate deals. Negotiate with suppliers for better terms and explore buying used equipment to save on expenses. Moving on to tip number two.. Higher top talent on a budget. Now, recessions often lead to unfortunately increased unemployment, making it easier to find highly skilled and experienced candidates who are eager to find work. You can build a solid, high performing team without breaking the bank. In the 2001 recession, Salesforce was able to hire top talent laid off from other tech companies. This influx of skilled professionals played a crucial role in the growth and eventually solidifying their positioning in the CRM software market. Here's a pro tip network with your industry. Check out those job boards and attend job fairs to find the best talent at a fraction of the cost. Next is our third tip, which is seize the opportunity. Less competition. A recession can be a challenging time for existing businesses, which can lead to business closure. This means less competition for your startup, allowing you to swoop in and grab a bigger piece of the market pie. During the 2009 recession Square, a mobile payment platform launched in a market with reduced competition in the payment processing space. This enabled them to quickly gain market share, and build a strong customer base. Here's a pro tip. Identify market gaps and researche your competitors to pinpoint where you can shine and set yourself apart. Moving on to tip number four, build and lean business machine. Starting a business during a tough economic times requires resilience,

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innovation, and resourcefulness. This means

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you'll develop a lean, inefficient operation that will serve you even when the economy bounces back. An example of that is Airbnb. Airbnb founded during the 2008 recession focused on offering cost-effective alternatives to traditional

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accommodations. Their

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lean operations and adaptability to market conditions contributed to their success and growth. Here's a pro

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tip,

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Adopt and lean startup mentality and focus on cost control, efficiency, and adapting to ever-changing market conditions. My fifth and final tip set the stage for explosive growth. History has shown that businesses founded during a recession have the potential for massive growth as the economy recovers.

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By laying the groundwork during those tough times, your business will be positioned to, to thrive

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when the economy picks up. For example,

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this should give you a little bit of hope and inspiration. Both

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Microsoft and Apple were founded during the 1970s recession. As the economy recovered, these companies experience rapid growth becoming

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two of the world's most successful and valuable brands.

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And here's my final pro tip plan for growth. By setting clear measurable goals and securing

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the

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resources you'll need to expand. Here's a bonus tip, safeguard your mindset. Being mindful of the information you take in of the people you surround yourself. While it's essential to stay informed about the economic situation and how it might affect your aspiring business, being mindful of the information you consume. Overexposure to negative news can potentially lead to feelings of anxiety and helplessness. Limit your news intake and focus on reliable sources that provide objective information rather than sensationalism. And lastly, surround yourself with positivity. The people you surround yourself with have a significant impact in your mindset. Lean on your tribe and or your support system to connect with like-minded entrepreneurs, mentors, and positive individuals who can offer support, encouragement, and valuable insights. My friends, starting a business during recession might sound risky, but with the right mindset and or a robust strategy plan, it could be the opportunity of a lifetime. By taking advantage of lower cost and more accessible talent pool, reduce competition and the potential for high growth. You can build a business that's ready to serve when the economy rebounds. As we close today, remember, success isn't guaranteed, but with the smart and well- informed approach, you increase your chances of launching a thriving startup even during a recession. So why wait? Grab this opportunity by the horns and start

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building your dreams today.

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Thank you so much for joining me today. I hope you enjoyed our conversation. If something I shared today resonated with you, please tag me@cindymarie.co on Instagram. If you enjoyed this podcast, please leave an honest five star review. When you do, it helps us to grow the podcast and helps others to find us as well. Be sure to subscribe to the podcast so you know when the new episodes are being. You can subscribe right from the app that you're using to listen to this podcast, or you can sign up for email alerts@cindymarie.co. Lastly, if there's something you'd like to hear about in a future episode or if you just wanna stop by and say hello, please feel free to DM me@cindymarie.co on Instagram. Thanks again for listening to The Brave Pivot Podcast and I'll see you next time.