The Best Time to Start a Business
I hear it all the time “this is the worst time to start a business”. And I couldn’t disagree more. Sure, there’s no such thing as the best time to start a business, but given the mouth-watering opportunities the current recession is serving up, this feels like a pretty good time.
The trouble with recessions is they hurt. Businesses close, people lose jobs and wealth gets destroyed. Painful as they are, they mark the end of a business cycle and signal a renewal, clearing the way for new ideas and new businesses. Businesses that really understand the customer, that are agile and laser-focused on improving client experience.
The current downturn is far from over, but I see encouraging signs.
As economies emerge from the deep freeze, factories are buzzing, banks are starting to lend more in select areas and consumers have resumed their spending. This naturally creates opportunities and momentum that businesses can work with.
So, with that said, if you’re someone with ideas kicking around in your head, wondering if this is the best time to start a business, read on.
Customers need innovation right now
First things first. Innovation. It’s no secret that success in business depends on innovation. In a downturn, businesses conserve cash and tend not to invest as much in innovation. And guess what? That creates a gap between customer needs and what solutions are on offer.
In my experience, that gap usually is just wide enough for a disruptive idea or a business to sneak in, offer something truly amazing and blow the competition out of the water.
Think about it, some of the best known businesses today started in or just after a recession. IBM, Microsoft, FedEx. And more recently, Uber, which single handedly revolutionized the taxi business, took shape in the depths of the 2008 financial crisis.
Low interest rates
Secondly, as economic activity slows and consumers pull back on spending, banks and financial institutions cut interest rates, making it easier for entrepreneurs to access funds and raise capital. A well-researched business idea and a compelling business plan can mean the start of something new and beautiful.
Talking purely from a funding standpoint, this is the best time to be starting a business.
High quality talent pool
Thirdly, employees are the secret sauce of any business that wants to grow and create value. Anyone who has been in business will tell you finding, retaining the right people consistently is the hardest to do. In other words, It’s a war for talent and there aren’t enough good people to go around.
Except when you’re in a downturn. As businesses close and employees lose jobs, not only are there more high-quality workers looking for work, there are fewer employers actively recruiting.
My point: this is the perfect time if you want to build that dream team.
You might not have to start from scratch
Most entrepreneurs and founders I’ve worked with prefer to start afresh. That said, one of the pluses of starting up in a recession is the possibility of buying a business or acquiring a lease or patent at fire sale prices.
Fair warning: buying a struggling business to turn it around isn’t for everyone and certainly not for the first time entrepreneur. More on that later.
Lastly, a recession is also a great time to stress-test your business strategy and check your assumptions. In addition, to mapping out the level of support you have from people and institutions before you venture into your journey of being an entrepreneur.