By Nellie Akalp
The “R-word” doesn’t have to be paralyzing if you’re an aspiring entrepreneur.
“Recession” is a scary word for business owners. That’s understandable—an upside-down economy brings challenges and risks. However, the “R-word” doesn’t have to be paralyzing if you’re an aspiring entrepreneur. Some positive thinking, preparation, and action can go a long way toward helping you rise above the downturn and build a thriving, successful company.
How do I know this? My husband and I launched our company during the Great Recession of 2007-2009.
As larger companies lay off employees, entrepreneurs who provide services to self-employed self-starters can find opportunities during difficult economic times. This was the case with my company: the recession fueled the demand for our business formation and compliance filings services. Other business-to-business fields well-suited to building businesses during a recession include bookkeepers, accountants, tax preparers, IT professionals, and freight and logistics companies.
Historically, recessions tend to increase the demand for affordable household and personal staples, too. Industries known to do well include discount grocers and retailers, home and auto supply stores (that sell goods for DIY repairs), health care, and cosmetics.
Of course, businesses, regardless of their industry, may succeed or fail. That’s why it’s critical to assess your strengths, weaknesses, opportunities, and any threats beforehand to get a realistic picture of your situation and its potential.
When we first started out, our biggest challenge was gaining market share. A few big players were our main competitors, so we had to introduce ourselves to the market in a memorable way. Rather than put all our money into expensive ads and other marketing collateral, we invested time into grassroots efforts. We put a face to our name by doing a lot of networking at business and industry conferences. At those events, we also presented educational seminars to showcase our expertise. That in turn, led to a lot of word-of-mouth momentum.
I believe those sorts of grassroots approaches offer the same bang for your buck today. With so many companies relying on digital marketing to attract business, entrepreneurs who recognize the value of face-to-face networking can quickly make a name for themselves.
More articles from AllBusiness.com:
Recognizing that starting a business during a recession comes with risks, my husband and I mapped out a “Plan B” just in case things didn’t quite go in the direction we anticipated. Part of that plan was alternate service offerings we could provide in the event the recession would drag on longer than expected.
Entrepreneurs should always have some backup planning in place—even when they aren’t dealing with a recession. While you can’t predict the future, you can use reason and logic to anticipate potential challenges. By thinking about “what ifs” and building strategies to address them, you give yourself an opportunity to adapt and pivot when less-than-desirable circumstances arise.
When we started our business in 2009, we vowed to provide a consistent experience and never resort to the sorts of “bait and switch” tactics that some other companies used to draw in customers at the time. That may have cost us a little more money at first, but it was well worth it because it established trust.
While it may be tempting to bend the truth or skimp on quality or quantity during a recession, that’s a surefire way to drive a business’s reputation through the dirt. New businesses must make a name for themselves by delivering on their promises to customers. If a company fails to meet the standards that customers expect or makes the experience difficult, it sets itself up for failure.
My husband and I honed our entrepreneurial prowess during the Great Recession. The challenges and discomfort made us more aware, intuitive, and effective business owners. We found that starting a business in a recession brings opportunities to learn and grow as entrepreneurs. But it’s up to you to make that happen!
Things change over time no matter when you start a business. During economic upheavals, changes can occur quickly and often. So, especially during a recession, it’s essential to watch for shifts in customers’ needs, the regulatory environment, supplier availability, and other factors that influence how you do business and affect your ability to serve your customers.
Is there ever a perfect time for starting a business? Recession or no recession, challenges and risks will always be part of the equation. A business idea is just an idea until an entrepreneur sets it in motion. If you’re passionate about your entrepreneurial pursuits, start doing your homework now to evaluate the feasibility of your idea.
What opportunities might you find amid the recession? What contingency plans can you put in place to navigate the potential obstacles? Stay optimistic and realistic—it’s a combination that will serve you well in any economic climate.
About the Author
Nellie Akalp is Founder and CEO of CorpNet.com, a trusted resource and service provider for business incorporation, LLC filings, and corporate compliance services in all 50 states. See Nellie’s articles and full bio at AllBusiness.com.
RELATED: These 5 Tips to Recession-Proof Your B2B Business Will Help You Weather Any Economic Storm