5 good things about starting a business in this recession
A recession may seem to be a bad time to start a business. However, I beg to differ. Recessions are like naturally occurring forest fires. A lot of dead wood is eliminated and new green shoots soon appear. It should be your objective to become one of these new green shoots.
We should also remember that it’s 2009, and that technology available to entrepreneurs right now has changed the game. In this recession more and more start ups are looking to leverage the latest technology.
There are many advantages to starting up in this recession. Here are 5 of the main ones.
1) More scope to negotiate down professional fees.
Unfortunately, professional fees are part and parcel of starting a business. However, in a recession you have more power to negotiate these down. As a result, should should be able to secure good value for your accounting and legal fees.
2) You can attract high quality hires.
During a boom, most of the good talent are working for large companies. They are paid more than you could ever afford. In a recession, many great people are laid off and therefore are available for a start up to hire.
3) You gotta be lean.
Investment is down, but this is a good thing. It forces you to bootstrap more. You must build a business model that is extremely lean. External investment in a recession is likely to happen at a later stage of development than in a boom. This means that you will give up less of your company in exchange for investment. Although it is harder in the short term, in the long term you and your business will be better off.
4) Marketing has changed, in a good way.
It’s 2009 and marketing has changed. No longer do you need a massive marketing budget. The era of agressive advertising is over. A start up can get out there by using the internet to amplify word of mouth.
5) Technology helps cut down on your cash burn.
Using technology such as skype, base camp etc. instead of paying for a traditional phone and renting office space. Free software can be used such as OpenOffice, Paint.net, CamStudio etc.
As you can see, you can save thousands a year in start up costs.
All in all, the key is to position your company to take advantage of the next upswing.
