Is a recession the right time to start a business?
Opinions expressed by Entrepreneur contributors are their own.The simple answer is: yes, a recession is the right time to start a company. There are dozens of documented cases of great companies starting in the middle of an economic downturn, i.e. Google, Microsoft, Apple, FedEx, and hundreds of others. Here are three great reasons to start a business in a recession:
1. You will develop great habits. When you start your business in the down economy, you are forced to develop great habits. When I say great habits, I mean the uncanny focus on your business’ bottom line. Everything that you do will not only help generate revenue, but will help you increase profit.
When building your product, you aren't going to outsource production oversees because that's what your competitors are doing. You are going to develop a deep understanding of what the outsourcing entails and create systems that will enable you to do it as cost efficient as possible. You aren't going to waste money marketing. Your company will be the one building great stories that actually have customers calling you.
2. It forces you to build great products and services. Businesses and consumers alike are more judicial with their spending. They are not willing to buy average products and services that may or may not prove to be good enough to solve the problem that they have. They want the best possible (affordable) product that will most perfectly solve their problem. Average is no longer good enough. Your business and your products need to become great at something in order to survive.
3. If you succeed in a recession, you will thrive when the economy picks up. If you apply the good habits you learn during the recession, you will succeed even further and with greater scale when the economy begins to grow. If you continue to build great products during the ensuing economic growth, then you will be able to charge more for your products than your competitors and avoid price wars.
Now is a great time to start a business. Best of luck!