The continuation of declining investment markets paints a bleak picture in the coming months as an economic slowdown and potential recession are big for businesses. Yet many of the world’s largest companies were built in times of recession. Some experts say that economic downturn can present the best opportunities for a business to grow, while others are pulling back.
Could a launch or scaling up during a market downturn make your new startup the next household name? Here are some of the benefits that daring entrepreneurs can experience while scaling up during a time of economic uncertainty.
Opportunities to start or expand a business into new markets exist even during an economic † [+]
Less competition
Boom times attract investment from every corner. Everyone seems to have enough spare change to invest in the hope of getting rich quick. As the market collapses, many companies begin to shrink. Charles Gaudet, CEO of Business Coaching Company Predictable profitbelieves now is the perfect time to strike.
“Right now it’s time to take advantage of an open field. Your competitors are pulling back and spending less on marketing and advertising. Some have started firing employees. Others are keeping it quiet and hoping for the best. All these factors make it’s easier for you to gain market share,” says Gaudet.
You can take advantage of reduced or weakened competition to gain a foothold in the market. Position yourself to learn and avoid the mistakes made by today’s competition to jump ahead.
It’s easier to grab your customers’ attention
Companies with accelerated growth during boom times can struggle to gain a foothold when money is hard to find. This instability could be due to shaky foundations or poor business plans that failed to take into account the cyclical nature of the markets.
With businesses closing their doors, customers can look for alternatives to meet their needs. Your business can use the moment to provide value and grab the attention of your target customers.
You may need to take note of changing consumer behavior. “Keep in mind that you now have to adapt to a shift in buying behaviour. Your potential customers or customers are more critical these days. They have become researchers who want to make smart decisions. So you have to be the supplier of information that meets this need, ‘ says Gaudet.
You will enjoy better deals from suppliers
A recession also presents many other opportunities to start a business. Companies may try to lower their rates to attract customers and stay competitive. You may have access to many items you need for your startup at discounted prices.
These value rates can be available for office space, supplies, commodities or technology. Buying what you need for your business is easier without breaking the bank. You can gain a position to negotiate better long-term deals for your nascent business at below-market rates.
You have access to a talented pool of experts for your business
Unfortunately, a shrinking economy is leading to layoffs and organizational restructuring. The increased number of qualified individuals seeking employment can provide an opportunity to acquire a talented pool of employees that fits your vision and dreams.
Your new company’s competition for those people will be much less intense than it would otherwise be during a boom. In a recession, companies are more reluctant to hire and often lower their offers for talented employees.
This reality means that if you can secure the services of such a person, the financial benefits of doing so are likely to be greater than usual in the long run. During a booming economy, everyone fights for each other’s employees and offers generous packages to lure them away from their current jobs.
Don’t be afraid to start a business during a recession
Recessions are a big time to start your new business. Throughout history, recessions have been a driving force behind the creation of innovative and successful companies.
You can reap the benefits of reduced competition, better access to talented individuals, lower rates, and the potential to give your business your all. Finding the right opportunities (and being prepared for the worst) can put your business on the right track to success.