As the statistics goes, recession time is ideal to start new business. Most of the well known and successful companies are born during the time of economic downturn. If you look into the business model of all of the companies, you will learn their tenacity, how they recognize the market need and identify the consumer plan. I gathered some informations from my company about how to launch business as well as from a few of my buddies who work as chief strategist of different companies. I would love to share the information with you.
- If a client truly believes your service , chances are very high that they will recommend your name to their business associates. So, it is a good practice to build up further relationship with your existing clients during the time of uncertainty. Many of your competitors are neglecting their clients as they attempt to keep up new business actively.
- Things are very dicey to finance your start up business during recession time. Most of the VCs and Angel Investors are reluctant to provide fund due to the uncertainty of the future of the business. Usually, the entrepreneurs of the start up companies initiate the business funding with 30% of their own money. You will be able to find lot of new small-business financing alternatives. Google “person to person loan” is to find companies that allow you to post your request for funds and will match you with an individual lender. Try On Deck Capital, an online lender that looks at your cash flow instead of your credit score and tax returns and collects small daily debits instead of larger monthly installments.
- A successful enterprise can keep up their profit during economic downturn if they underscore certain questions like who is buying the product, what are the priorities of customers in terms of their need, what incentive they can provide to lure the customer, how can you make your products more accessible to your target market etc.
- You can also improve your promotions, speeds up new product introduction and make yourself visible all the time to your prospective customers.
- Local, state and federal government looking to create jobs, may give tax breaks during a recession for companies that can employ.
- Many businesses die during the recession time for lack of planning or shortage of funds. Although, one business dies, that niche remains and a start-up company will be able to fill the void.
- Since, lot of people are out of jobs during the receesion time, this is a good time to hire quality employees. You may have to pay less to hire skilled employees.
- Layoff is not a fun at any time. But, if there is extra fat in your company, this is the time to trim it. You can cut the cost of your overhead this way.
- Good companies view recession as a learning curve. They realize that old thinking and strategies may not be able to address today’s challenge. Recession motivates them to get closer to the customers and they also reassess their strategies and thought process in a creative way.