Introduction
According to the media, we’re approaching a recession, and many businesses may struggle. Some wonder if they should focus on growth or batten down the hatches and wait for the storm to pass. Well, history has shown that recessions can actually be a great time to start a business. Just look at some of the most successful companies out there today:
- Microsoft launched in 1975 after the 1973 oil crisis.
- FedEx started in 1971 after the 1969-70 recession.
- HP launched in 1939, and we all know what happened then.
In more recent times, AirBnB and Uber began during a recession. And although it had been trading since the 1970s, Apple thrived after the tech crash in the early 2000s. We hear they’re doing ok these days too! In fact, Apple CEO Tim Cook has openly said they believe in investing during economic downturns.
So what does that tell us? Recessions can be fertile ground for businesses to grow and thrive. Sure, it’s not easy to start a business from scratch when finances are tight, and consumer confidence is low. But if you can weather the storm, the rewards can be huge. Here are a few reasons why:
Recessions Force People to be Creative
When times are tough and budgets are tight, people have to get creative to survive. This creativity can lead to new products, services, and ways of doing business that can give your company a competitive edge.
Recessions Create Opportunities
When companies are forced to cut costs, it often results in layoffs and businesses shutting their doors. This can open up the market for smaller, more nimble companies to step in and fill the void. For example, when the 2008 financial crisis hit the US, many big banks pulled out of small towns, leaving a gap in the market that was quickly filled by smaller regional and community banks.
Recessions Bring Out the Best in Entrepreneurs
Entrepreneurs are often risk-takers by nature. They’re not afraid of a little (or a lot) of adversity, and in fact, they usually thrive on it. A recession can bring out the best in entrepreneurs as they’re forced to think outside the box, be resourceful, and solve problems quickly.
Recessions Weed out the Weaklings
In any economic downturn, not all businesses will survive. The weak will go out of business, but the strong will endure. If your company can weather the storm, that will make you even stronger and more resilient when times are good again. And you’ll have fewer competitors in the marketplace.
Recessions Force you to be Frugal
One of the best things about starting a business during a recession is that it forces you to be frugal with your resources. When money is tight, you learn how to stretch every pound and make do with what you have. This is a massive advantage in the long run because it teaches you how to be lean and mean – a crucial trait for any successful business.
Recessions Provide Motivation
What do startups and recessions have in common? They both require a lot of grit, determination, and creative thinking. When times are tough, and the job market is tight, people are motivated to start their own businesses. They’re willing to take risks because they have nothing to lose. And when faced with adversity, they’re more likely to develop innovative solutions.
Summary
So should you focus on growth during a recession? Absolutely! There are plenty of advantages to starting a business during an economic downturn–just ask Apple, HP, or Microsoft. If you’ve got an idea for a new business, don’t let a little recession stop you from making your dreams come true.
