After hearing about the entrepreneurship theme many readers emailed me asking if it was appropriate to discuss such a topic during a recession? Readers questioned whether entrepreneurial activities are worth pursuing during an economic downturn? Since I was being faced with these questions I figured it would only make sense if I did some research and talked to others about the subject. Upon speaking with professors, fellow students, people online, and friends engaging in true entrepreneurial activities, I came to the conclusion that it is definitely worth starting your own business during a recession. For lack of a better term I will spend this whole article discussing Recession Entrepreneurship.
Things you should know:
No/minimal profits. Depending on the business venture there is a strong chance you won’t be raking in the profits for the first little while. Even if you do make a slight profit don’t expect to be buying a new BMW any time soon.
Difficult to gain traction. Reality will hit you and you will realize that your business is not exactly recession proof. It will be difficult to gain the first boost of sales or a solid market position.
Growth may seem impossible. It will feel as if your business is not growing and will never grow. The truth of the matter is that profit should not be your only measuring stick when you’re viewing the progress of your business.
Benefits of starting your own business venture during a recession:
Master your skill. You can use the current recession to become the very best at what you do. When the economy rebounds you will have hopefully mastered your skill to the point that people have no choice but to use your services due to the high quality you offer.
Gain recognition. People may not be able to afford your product or be willing to give up their hard earned money but they will definitely be aware of who you are. From seeing you around and from word of mouth you could build up a distinguishable reputation for yourself.
Prepare for your future. Short sighted thinking often gets us into trouble, which is why starting your own business today is a long term investment that will hopefully earn you a decent income one day. You have to be willing to accept the fact that you won’t see those returns you are expecting until a few months or years down the road. This may require that you keep your current full time job for the time being.
{ 4 comments… read them below or add one }
Nice article – I like it. I think the entrepreneurs who get their start during a recession work harder and understand what it takes to get the job done. Most people are struggling to take care of their own situations, so a lack of competition might be a factor, too.
I applaud your spirit and desire to improve yourself despite all the doom and gloom.
Good insight.
-Nate
Yes! Entrepreneurs of today are solving the problems of tomorrow. Times like this are when entrepreneurs are born. They live for these times and capitalize on the seemingly invisible opportunities out there. With technology making the advances that it is, there are more opportunities available to day then there ever were in all of history. The internet gives you access to everyone in ever part of the world. This is something that was never true before the 21st century. And in this, many will prosper. The exciting part is that we really haven’t seen anything yet.
Very timely topic. I touched on it here http://www.myliferoi.com/2009/03/good-time-startup/ also!
I mentioned that Apple and Microsoft were both founded during the 70s which as we all was not a time of economic growth! They also had the luck of being in the right place at the right time. Their is a whole slieu of history behind Apple, IBM, and Microsoft. Real interesting stuff.
This is a snippet from my post I linked:
“How could this be? Technology, often times, works as a deterrent to economic decline. New technology often gives the economy new efficiencies in which to grow.”
So, if you have a great idea, GO FOR IT!