My wife Jessica and I are considering having a baby. We have been thinking about it for a few years now, but the timing never seems to be just right. At first it was because we didn’t feel we could afford one, and then it was because we didn’t own a home, next it was because I was starting a new business. We always seem to have one excuse or the other for putting off the baby discussion for a few more months.
When I tell my other friends that have kids these excuses they all seem to have the same reply, “You’ll never find the right time to have a baby. There will always be a reason to wait.” And you know what, they’re right.
It’s the same reasoning behind starting a business. The timing never seems right. A lot of wanna-be entrepreneurs have said it’s not a good time to start a business because of the economic recession.
Well I’d like to hear them tell that to Bill Gates, Thomas Edison, Walt Disney, and all the other entrepreneurs that started their empires during tough economic times.
Microsoft was born in 1975, during turbulent economic times, oil prices were sky high, stagflation was everywhere and interest rates were through the roof. Today the company is estimated to earn $60 billion in revenue per year.
General Electric (GE) was started by famed American inventor Thomas Edison in 1876. In the middle of the Panic of 1873, a six year recession, Edison created one of the best known inventions of all time—the incandescent light bulb. Today, GE is the third largest company in the world in terms of market capitalization.
Motorola was started back in 1928, a year before the Great Depression struck. It’s lasted through all of the recessions that have come and gone since.
Revlon started selling make-up to women in 1932, the height of the Great Depression.
If any of these businesses had listened to the hype they would have never opened their doors. The truth is recessions, depressions and tough economic times are one of the BEST times to start a business. They provide advantages that aren’t found during uplifts in the economy. Here’s why YOU should start a business right now:
Suppliers Are Hurting
When a recession hits, it’s not just B to C businesses that go through tough times, but also B to B businesses. Suppliers, manufacturers, and wholesalers are hurting. Their clients don’t order from them as often or have stopped placing orders from them altogether.
In good economic times these businesses wouldn’t dream of working with small businesses. But in recessions they welcome any business, even if it’s from small, one person companies like you and me. Our current economic conditions have led manufacturers and suppliers to sell smaller quantities, which makes it easier on start-ups.
The best part of this is that when the economy turns around again, you’ll have the advantage of an existing relationship with the supplier. They will want to continue to do business with one of their long standing clients.
Less Competition
When times get tough, businesses tend to cut their spending, reduce the amount of employees they have, hunker down and just try to make it through the recession. These actions reduce the amount of competitors in the marketplace.
Entrepreneurs who know how to seize opportunities can greatly benefit from these actions. They can benefit from plenty of affordable talent, cheaper real estate for their offices, lower costs and weakened competition.
Take advantage of this time frame, instead of just trying to survive. Build a thriving, growing business without having to worry about being priced out of the market.
Lower Costs
Right now, everything is cheaper than it was a few years ago. Many of the products and services you’ll need to run your business are available for less than it was before: accounting services, real estate, office furniture, legal services, book keeping, supplies, and other goods and services.
Starting a business in today’s economy will be cheaper than it was if you started it a few years back. Take advantage of these lower costs, they will help your dollars go farther. This way when the economy turns around and prices go up your business will be well established with good cash flow.
Position Yourself for the Future
Economies move in cycles. We won’t be in a recession forever. Eventually the economy will recover and we will go into another boom period.
By making a business work during the hard times, you’ll be set for the turn around when the economy is booming again. And by that time your business will be well established. Your competition will just be starting to emerge from survival mode and not be as ready as you are to reap the great gains from a robust economy. You’ll also be a seasoned entrepreneur by that time and will avoid the mistakes overzealous business owners make in economic up swings.
Why not now?
The truth is there never is a perfect time to launch a business. You’ll always have naysayers telling you to wait till the economy recovers more. If you listen to them you’ll never do it. Just remind them of all the benefits and advantages that aren’t there when the economy starts heating up again.
As Nike says, “Just Do It!”
Good luck!
Ethan Warrick
