Tough times are here. Many Albertans have lost their jobs. Company and personal insolvency numbers are increasing. Some are choosing to exit the province in search of greener or more familiar pastures closer to family support, while others search for whatever job they can find.
Rental leases are being renegotiated as they come to reflect the current market value as vacancies increase. We have seen people battening down the hatches by reducing retail spending and cutting luxuries like dining out. The lucky ones pull from savings, receive severance, or have a working partner to lean on and are taking this time to clear their head, restore balance, and take some time to check in with themselves as to what’s important to them.
It’s from this place of renewed perspective (that any of us can choose each day to possess) that thousands of new businesses will be born.
Without the distraction, stress, and demands of the job and the daily grind, people can get back in touch with what they've always wanted to do. There’s usually a project, idea, or initiative that we all have that we always imagined we’d get around to —“one day.” That “one day” is here for some. Chances are, your desire to start a business is rooted in contribution to others or a need in the market that you can see filling in your own unique way. By stepping out into this new endeavour, you can raise your level of career life fulfillment and take steps towards the financial abundance that we all desire.
I would like to insert this caveat—I’m not necessarily an advocate of quitting your job or current business in hopes of finding career life fulfillment “out there in the future somewhere.” I believe there’s a “10-20 per cent” of whatever you are doing right now that is aligned with what lights you up which creates career life fulfillment right now. Those areas, if focused on, can and will grow to the point that that’s all you do, in time. Starting a new business from scratch, in a new industry, is risky and difficult. But if you’ve lost your job by playing by the rules of a job you’re familiar with, you know that that’s not exactly the safe answer either.
Here are eight great reasons to start a business during a recession.
1. There are fewer competitors
As a downturns persists, there will be fewer business owners that stick with it. People leave town, get new jobs, or do something else. At the onset of a downturn, most of the competitors are still there slugging it out for a smaller piece of the same pie. Eventually, the supply of services will adjust to lessened demand, sometimes over compensating and leaving only the crème de la crème with all the business.
2. People are eager to save money
As a low overhead startup working with a bootstrap budget, you can undercut the competition. Clients will hold tight to their wallets and are looking for more cost effective alternatives. It’s the perfect time to introduce yourself and your product or service. It’s also a great way to gain market share, and build a name for yourself by doing quality work so you will be able to raise your prices when the recession lifts.
3. The market is ripe for innovation
Newcomers to the market can often see things from a fresh new perspective. Spot industry gaps not currently being serviced in ways more entrenched competitors can’t see or are not flexible enough to capitalize on. Look for the opportunities and trends in the changing market, i.e. Blockbuster Video closing down. Anyone wish they'd bought Netflix stock that week?
4. Abundance of investment capital, low interest rates
Uncertainty in financial markets, real estate, commodities, and currencies, has investors hoarding cash at peak levels and they are eager to back great people with good ideas. Getting involved with private investors can provide you not only with the necessary capital but often a deep well of business wisdom for you to draw upon. Traditional bank financing is also very attractive if you fit within their risk tolerance.
Don’t give up if the bank says no, that’s just a place to start. Just because you were declined at a bank has very little to do with the validity of your idea or your ability to perform well in the market. Do, however, heed the advice and take into account the opinions of those with the gold. They didn’t get to where they are by investing in losing endeavours.
5. The “why” advantage
As mentioned above, many businesses start out of a passion or deep desire to serve and help others. You are very clear on what the value and difference your unique reason is for bringing your product or service to market—your “why.” Owners of established businesses often lose touch with this “why” under the pressure of to-do lists, administration, and responsibilities for staff, customers, suppliers, creditors, etc. You have the ability to shine your light and yell your “why” from the mountaintops, while the others are entrenched in their daily activities. Your new customers will find your enthusiasm a breath of fresh air amidst the doom-and-gloom of the market.
6. Empty snail shells available for you to move into
Recycling is almost always a good idea (unless it’s an ex-spouse). As the market culls out competitors, they often have excess inventory, equipment, leased space, customer lists, contracts, or opportunities that you can capitalize on for a song. This is a great time to put the word out for what you are looking for to others on social media, Kijiji, and within your network. Be on the lookout for partnership opportunities. Existing proprietors may be looking for an energetic business saviour just like you to come in and take the reigns with your fresh approach.
7. Great staff available to hire
Once you have the need for staff, contractors, designers, or administrative support, you’ll have your pick. The labour shortages of the good times are a distant memory and you can offer employment to the very best and brightest. It's a blessing to work with highly qualified people that you can afford and connect with. That’s all possible now.
8. The starting small and lean advantage
Don’t ever forget the lessons we all should learn in a recession. A good habit to continue is adopting a low-overhead model. Think twice before signing up for another monthly automatic debit and continuously evaluate spending in both personal and business realms.
Keep life and business simple, remembering balance to take care of your health and relationships along the way. Remember you are not alone, there’s support available. Remember your "why." Longevity and career life fulfillment could be yours.
Dave C. Bonk is an entrepreneur and philanthropist in Calgary. His passion is to assist others in overcoming obstacles that stand in the way of their best life and business.