As demonstrated by the effects of the global COVID-19 pandemic, an economic slowdown is a difficult time for everyone. Unemployment and shortage of supplies abound and businesses, especially small businesses, suffer irrevocable losses.
It is commonly perceived that starting a new business in uncertain economic times is a recipe for disaster. However, a smart entrepreneur can create a business opportunity if they’re quick to provide unique and robust solutions to new problems.
Contrary to popular belief, there are a few benefits to starting a business during an economic downturn:
- Your expenses will be minimized since you’ll be forced to bootstrap your business.
- If you earn loyal customers during this time, they will likely stick with you even after the economy resurfaces because you helped them get through difficult times.
- You may be able to attract talented team members who lost their jobs due to company closures and downsizing.
- You may be able to acquire business assets at a lower price as many companies may sell their offerings for less.
If you’re looking for ideas on how to lift your business off the ground during troubled times, here are five useful tips to help you out.
1. Identify a Need
The altered economic situation will bring about significant changes and create unusual patterns of supply and demand. New needs may emerge or people may seek alternate ways to meet existing needs.
The most widespread effect of an economic slowdown is that people want to save money. A business that provides inexpensive alternatives for essential products or services would likely bring in customers. For instance, garden space in your own backyard may allow you to grow vegetables and become a low-cost supplier to local neighborhood shops. You might even start your own online grocery store!
All you have to do is register a domain name such as www.homeveggies.online, build a simple website, and start selling.
With movement restrictions created by the pandemic, people are seeking at-home alternatives such as online fitness and hobby classes, as well as home delivery services.
Tapping into these needs during an economic slowdown will not only result in new customers but will also be cost-effective for you since most remote services require little investment.
2. Work with What You Have
Providing low-cost services will only be profitable if you keep your expenses to a minimum. Start by taking stock of the resources you already have on hand and how you can make the most of them. These include existing space in your home or office as well as skills and experience. Combine all of them to create a business that:
- Allows you to work with minimum investment
- Keeps the cost of your goods and services low
- Permits easy and hassle-free delivery
- Helps you channel your passion and hone your skills
If you have a particular skill or talent, in music or the arts, you can conduct online classes from the confines of your home. You can also become an online fitness instructor, homeschool teacher, graphic designer or writer to share your skill while supporting yourself financially and creating a new business.
For a musician, a brandable domain name like www.sweetmelody.site and a simple portfolio is all you need to get started.
Avoid ideas that entail large-scale investments, especially those concerning real estate. For instance, you may need warehouse space if you’re starting an eCommerce store, which can come at quite a premium. See if you can sell something that you can store in a space that you already have—such as your garage—or consider dropshipping.
3. Find a Scalable Model
Once the economy experiences an upswing, the expectations of your business will change. Competition will increase and so will the demand and you definitely don’t want your competition to cash in on that.
When deciding which business you could start, keep its scalability in mind and have a plan ready for expansion when the time is right.
While you might be running a one-man show right now, you may need to hire people once the economy recovers. Though you can manage your eCommerce operations with dropshipping, at some point you’ll need to substitute or complement that with your own supply and delivery operations.
4. Hire Carefully
Economic slowdowns result in job losses and there will be many skilled people looking for new opportunities. This is a great time to hire a talented team to help you run your business.
However, tread carefully when you negotiate salaries for your employees. Unemployment is an unfortunate impact of an economic slowdown and there is likely great talent available for hire. Make sure you find a healthy middle ground between budgetary realities and ensuring your employees are adequately compensated.
Create a mutual understanding that as your business grows, your employees will see that reflected in their compensation. Treat them like associates by giving them ownership of what they are handling so they feel more invested. Foster an environment of trust, inspiration, and teamwork and do away with unnecessary hierarchical structures. This way, your team will stick with you through economic changes and will want to see you and your company succeed.
5. Create a Great Website
In order to maximize the reach and accessibility of your business, no matter how big or small, you should consider creating a website for your business. Here are a few things to keep in mind.
Your website’s design and the content will depend on how you plan to use it. Do you plan to sell products or simply provide company information to people who will search for it? Do you want a website that publishes relevant content or do you wish to use it as space where you showcase your work? Know the purpose and build your website accordingly. Then get a unique domain name that lets people know what your new business is all about at a glance.
In order to find customers online, your website needs to rank high on search engines. Pay attention to the loading speed of your website and make it mobile-friendly as a lot of people use their phones to perform online searches.
Next, opt for a design that is easy to navigate. People lose interest if it takes too long for them to find what they’re looking for. Finally, pay attention to the content on your website and use relevant keywords wherever needed, such as in your domain name, metadata, image captions and homepage.
Go with Confidence
Starting a business is not easy in any situation. By combining your determination, astuteness, experience and skills, you can kickstart your entrepreneurial dreams—no matter what the economy dictates.