We’ve all heard it, on the news and from the banks and businesses, that the economic downturn has made it near impossible for SMEs to thrive – but what about those who have successfully started a business in a recession? Are those who buck the trend merely lucky, or has the media over stated the difficulty in establishing a business in a recession? Exeid have put together some tips for those wanting to start a business in a tricky economic climate – we believe that if you’ve got passion, drive and have identified your niche, there are definite advantages to starting your business when the going seems tough.
The tips below are designed to give you an honest overview of things to think about when starting up a business in a recession – it is do-able!
Make your money stretch that bit further.
…are generally lower in a recession. From office space to employees, everything often costs a lot less, keeping your overheads low when it really matters. Why not go for a virtual office? While you’re just starting up it may be more beneficial to work from home while maintaining a good value virtual office in a prestigious city centre location. These can include mail forwarding so from your customer’s point of view, it’s just like you have your own penthouse suite – but for a nominal price.
Renowned entrepreneur Richard Branson stated on the Virgin Media blog “Timing is important – if I could start again I’d start more businesses during recessions, when almost everything costs 50-90% less than it is worth in the good times.”
Adapt to a changing market place.
With big, previously financially secure, corporations going out of business, this gives the smaller enterprises a chance to flourish. Where as before the recession you might have been put out of business by a larger company offering deals you cannot viably match, the tough competition can now give you a chance at a slice of the pie.
Exeid CEO David Ajose comments “The recession is the best time to start a business, without a doubt. I liken it to the environment of a forest fire – the big trees have been cleared and the sunlight can reach the green shoots that otherwise would have been shaded out, under normal circumstances. After a forest fire, the ground is fertile and provides the ideal environment for new growth. Following the analogy, it really is the ideal time to plant the seed of your new business and watch it grow!
Fill that gap in the market
Identify that gap in the market and do something about it. Rather than going through business tools such as sector research and market analysis, why not take a step back and look at a need you might have in your own life, that current suppliers don’t seem to be meeting? To take a trivial example, maybe you want a takeaway but you’re in the mood for a Sunday Roast? What if you could combine the two? If you’re thinking it, you can’t be the only one. Put your entrepreneurial hat on and set up “John Smith’s Roast with the Most – Chicken Dinner Deliveries.” If you’re supplying a real need, your target market will respond positively.
A good working relationship can lead to reciprocal business
Good relationships with suppliers, clients and like-minded business owners are more important in a recession than ever before. Putting in some time to get to know your clients can make all the difference in a recession-gripped market place that is demanding their custom. Are you the company they can relate to and trust? You’ll find that loyalty is the inevitable outcome of becoming the company they can rely on for value, service and integrity. Taking time to build relationships and trust with suppliers could result in a better deal – always be willing to talk about reciprocal business as you never know what opportunities this could bring you and the money it could save. This is a definite benefit to starting your business in a recession, where advantageous, mutually beneficial opportunities can be overlooked in an economically stable environment, when funds are generally more readily available.
It’s a jungle out there – ensure the survival of your new enterprise.
You’ve begun to build your empire and everything is going swimmingly – let’s keep it that way. Set your targets and goals and create a business plan designed to get you there. The key word here is flexibility, be prepared to adapt as a curve ball is going to hit you harder when in a recession. You may start out wanting to sell tomatoes, but it may be necessary to adjust to the market demands and sell tomato sauce instead. In an ever changing environment, your ability to quickly change your vision and plans for the better will be your greatest asset – your company will be young enough to do so.
Get the balance right, plan for the future but do what you can to take things one day at a time. Assess your priorities each day and work on the most important one until it is done. Procrastination will only delay the growth of your enterprise, and ultimately your payday.
Work ‘on’ your business instead of ‘in’ it – it pays to take a step back from the business occasionally and assess what you can do to progress it forward. How does your finance department rate out of ten? How about your HR? Looking at things with a critical eye will give you a fresh, objective perspective on how to improve your operation.
Remember, you’ve done the hard work, nurturing a business in a recession. As the economy picks up, things can only get better now you’ve laid the foundations!