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Episode #67
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How can it be a good time to launch a business when the economy is on a downward spiral and so many are worried about their existing businesses and when the future is uncertain for us all? It’s natural to jump to the defensive when you perceive a threat, whatever that is.
You have to take a breath and acknowledge that instinct and understand that it’s ok to be concerned if that puts you into action to make sure you are prepared, but it’s not ok to be paralysed by it. Because that’s exactly what happens if you let all the current negativity stop you from working towards that passion-driven business you have been wanting for so long.
I know this is a big thing on the mind of my listeners, so for this and the next 3 episodes, I’m sharing why you should not stop your plans to become your own boss despite what’s happening in the world right now and what you can do to keep moving forward with your business plans during this time.
THE RECESSION / GROWTH CYCLE
When it comes to economic difficulties, you have to remember one thing, we will get through it. It will eventually come about and we will sail into calmer waters. As a former student of modern history, one thing I learned is that history repeats itself, and in economics, the cycle of boom and bust is well known. There will always be economic lows, recessions and depressions, often accompanied by war or disputes, and usually followed by varying levels of prosperity. That is something we can be certain of, it's how the system works.
Most recessions in the post-World War II era last an average of 10 months, followed by growth cycles that last an average of 50 months. The last recession during the pandemic lasted 5 months, and what’s now called the great recession in 2008 - 2009 lasted approximately 15 months.
My question to you is, do you want your business to be in a position to make the most of the upturn when it comes, or just be starting out at that point and miss out on the good times because you are late to the game?
Life and business do not stop when shaky financial times come, and actually, the most successful players are those that either started or were in their infancy in times of economic downturns or recessions. Don’t just take my word for this, if you look online there is a lot written about well-known companies that started in times of depression, recession or downturn last century and are still around and thriving today. Like Disney and Wilko which both started in the great depression at the end of the 1920’s early 1930’s, Burger king in the 50’s recession, Microsoft which was founded during the 1975 oil embargo recession, MTV and JD Sports which both survived starting in the recession of the early 80s.
But what about closer to our time? The 2008/2009 Great recession birthed a bevvy of companies that today would be hard to imagine life without such as. …What’s App, Uber, Airbnb, Warby Parker, Graze, Groupon and Slack. And not forgetting Instagram and Pinterest which started at the tail end of that recession.
There were also those who were in their infancy during times of recession that survived and are now big players…anyone heard of Netflix?!, who survived the dot com bubble collapse in the early noughties.
Can you imagine life if any of those companies had said “nah the economy’s not great, let’s wait until later, or let’s give up’’. Yes, they may have launched eventually but perhaps a competitor may have got in there first, or at the very least they would not have come as far as they have.
BENEFITS OF STARTING NOW
Even though right now is a difficult time economically (and I in no way want to downplay that) there are benefits to starting a business now, which the companies I mentioned earlier took advantage of.
The first is that your competition could be hiding. Just like you may have doubts about entering the small business market now, so are your potential competitors. Usually, when a new business starts, you not only have to worry about the big players but also the new entrant business owners like you, who are just starting out.
Although there is room for you all, wouldn’t it be nice to have a clearer playing field?! When everyone else is waiting for better times, you can be there now offering your services or products when the marketplace is less crowded.
The next benefit is that the bigger players are struggling. They have bigger operations than you and so will have overheads and employees to pay. If you start your business leanly and with an angle that is attractive to people right now, you can get the upper hand against companies that are less able to pivot to new ways. I’m going to talk more about this in the next episode, so won’t go into more detail now.
Another benefit at this time is that people are looking for cheaper alternatives, which means that if you can offer something at a better price than better-known companies in your type of business, then people may be willing to give you a chance than they would normally be. You have to be careful here though because it depends on who your ideal clients are. If your ideal clients are people who are not going to be affected too much by the economic downturn then offering lower prices may actually be bad for you.
The next benefit of this time is that people are looking for ways to escape the negativity. It’s a natural human trait to want to escape from anything that is difficult, even just for a short time.
Disney discovered this when people wanted to enjoy the fun of a small mouse rather than wallow in their difficulties and were willing to pay to do so. Also, Airbnb realised that offering people an easy way to make money from their own properties and to be able to visit other places for a good price was business gold.
So if your business is something that can offer them some escape, some immediate relief from their problems, there are people who will be willing to pay you for it.
A benefit that is one that is a result of starting during a downturn is that you’ll build a lean business with good financial habits. If you start when times are good and making money is relatively easy, you can get into bad habits and you will get a shock when you eventually do go through a more difficult economic time which is inevitable. This way, you get to put all the practices in place that means you can keep going whatever the circumstances
Finally, you’ll have a great brand story. If you know anything about marketing and branding you know that having an interesting and inspiring story about how your business started is important to be able to tell in the future. So you can use all you go through, the challenges you face and how you get through them to find your success to add to your own brand story.
DON’T BE RECKLESS
Although it can be a good time to start a business now, it doesn’t mean that you are reckless and start without the basic building blocks of your business in place and a strong foundation set. Unless you are forced to by redundancy, I believe in only moving out of your day job when you have either started your business as a side hustle and are ready to move it full time, or if you are going to go part time while you build the business or you have a strong research-backed idea and have prepared financially to support yourself and the business as you grow it. In all cases, you need to have learnt all you can about business and have a solid strategy and plan in place on how you will move forward, from the day you leave the office for the last time.
THE BOTTOM LINE IS…
Life does not stop for you, or the wider world, to get all your ducks in a row. Sometimes you need to to start messy, to start in less than ideal circumstances or, my friend, you will not start at all. If you procrastinate using the economy or other outside forces as an excuse, you may find yourself left behind.
Remember why you wanted to become your own boss in the first place. Have any of those reasons gone away? Is your vision for the future any less desirable? Is your craving for freedom any less intense? Are you still willing to put the work in to make it happen?
Then don’t wait for the ‘right time’ which I’m telling you will never come, because there will always be something that will seem like a good reason not to go ahead.
