Start a business in any economy
Just as individuals worldwide experience seasonal changes, enduring the cold winter weather and enjoying the warmth of summer, the economy also undergoes cyclical fluctuations. During good times, financial worries disappear, and professional aspirations flourish. However, you may have doubts when contemplating starting a business during a recession.
The truth is that winter is the best time to start a business. Why? Because if you can thrive in winter, you can succeed in any season. Uber, Venmo, and WhatsApp launched during the Great Recession of 2008 and achieved massive success. You can follow the same path to success with the right approach and mindset.
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Should I open a business during a recession?
Starting a business in a recession can be one of the smartest things you ever do, but you need to do it right. Recession or not, most first-time businesses fail within ten years, so it’s easy to see why many potential entrepreneurs are hesitant. How can you succeed in launching a new company and opening a business during a recession?
In any economy, starting a business is 80% psychology and 20% skill. A business is only as strong as its leader, so having the right mindset is paramount. As Tony Robbins says, “Whether you suffer or succeed is not based on the season. It really comes down to what you do.”
6 tips for starting a business during a recession
How can you build a business that makes it past ten years and leaves a legacy for generations? It’s all about developing the right mindset and the right skill set.
1. Take inspiration from major innovators
Did you know Apple launched during a recession? Steve Jobs initially made computers in his garage and sold products from a Volkswagen van. Still, he went on to achieve huge success, partially because of when he decided to debut his company. Disney, Fortune Magazine, and Microsoft were all founded during recessions. How did these mega companies succeed in the worst possible economic conditions?
Renowned for their hardworking, talented founders, the founders of these companies also had something else in common: they took the risk of starting a business during a recession. While their competitors feared failure and avoided entering the market during a volatile time, companies like Apple did so anyway. As a result, they set themselves apart as radical innovators and went largely unchallenged for an extended time. The founders of these businesses didn’t ask for the economy to change — they found ways to improve their products and differentiate themselves in the marketplace.
2. Be confident in your competence
When starting a business during a recession, you must have complete faith in the value you offer consumers. Steve Jobs and Walt Disney chose good times to launch their companies but felt unshakably confident about their creations. Can you say the same about your company?
Have you considered your differentiator or what truly sets you apart from others in your field? That’s your X factor and the most crucial part of opening a business. Traditional business strategies, like marketing, diversification, and scaling, are meaningless unless you’re confident your product or service provides something unique and valuable.
3. Anticipate, don’t react
As you think about potential business opportunities during a recession, remember that the world, and the market, are constantly changing. Hammer this mindset into yourself, so you never become too comfortable. The most successful people in the world don’t wait for something bad to happen and then react to it — they anticipate everything that can go wrong ahead of time.
Starting a business in a recession can be challenging. When you know the road ahead will have obstacles, you can anticipate that you need to account for potholes, accidents, and unpaved sections. Don’t just create a business plan; create a business map — an in-depth look at your processes, workflows, purpose, people, and goals. Do this, and you’ll prepare yourself for anything.
4. Examine your mindset
Without question, an unprepared leader — not the economy — is the biggest chokehold in any business. If you’re starting a business during a recession and don’t have the mindset of a winner, you will never achieve success. The first step is to look at your limiting beliefs, i.e., everything you tell yourself that holds you and your business back.
Are you putting limitations on how much you and your brand can accomplish? Are you setting yourself up to fail because you’re afraid things won’t work out? Fear of failure is one of the most common limiting beliefs, especially in business. However, you can overcome it by shifting your perspective. Instead of seeing failure as a negative, view it as a positive learning experience. Every entrepreneur fails; the difference is that successful entrepreneurs learn a lesson and quickly get back up.
5. Develop your skills
Next, objectively evaluate your skill set. Do you have the technological prowess to do your job? Are you stretching yourself too thin instead of delegating tasks to other employees? Do you have the leadership skills to excel? People aren’t born natural leaders — leaders arise over time.
There are many leadership styles, and one will undoubtedly speak to you. If you’re still at the stage where you need to improve your skills, don’t worry — you can learn how to lead and effectively manage your time and resources. Finding a mentor is one of the best ways to develop leadership skills. You also need to feed your mind the right fuel. Read inspiring books, listen to podcasts, and attend events that teach you new skills and introduce you to the right people.
6. Commit to constant improvement
If you succeed in starting a business in a recession, your work isn’t over. You need to set yourself apart from competitors and market your product, and constantly work to improve your offerings. When you sell something once, you make a sale; when you consistently offer something people want and need, you create a sustainable business. Strive to add value to people’s lives by continually innovating your brand.
Rather than making drastic changes, focus on consistently evaluating what works, anticipating gaps in the market, and strategically innovating to convert customers into loyal fans. Avoid the temptation to continuously release new products just to have something to sell.
When starting a business during a recession, don’t limit yourself by thinking there are a million reasons to wait until the economy rebounds. If your brand is ready to be launched, launch it! The market will always have ups and downs, and you’re bound to succeed when you anticipate these changes and offer something that provides value to the lives of others.
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