5 Reasons The Best Time To Start Your Business Is During An Economic Crisis
An economic crisis is always a terrible time for both a country and the people living in it. The unemployment rate rises, inflation sky-rockets, creditors lose, companies shutdown, and a general uncertainty makes both investors and consumers feel less likely to spend on any product or service.
While millions of people feel the pain of every economic crisis, an extreme few make the best out of their new or existing businesses in it. Their success makes people question the source of their income, and so, breeds contempt, rumours, lies, and suspicious investigations into their lives.
How then are these few making the most of the economic crisis? What do they know that others don’t? And why should you be learning from them rather than hold a negative stance against them?
If you’re still in doubt on whether or not to start a business during an economic crisis, here are five reasons you should not miss out on it:
See Also: How To Make Money In A Recession
1). Some Things Get Cheaper:
During an economic crisis, businesses sell off most of their items and assets at prices far lower than their original value, so they can have some cash to make more important ends meet. Great examples are e-commerce companies; they rollout heavy discount campaigns to acquire more customers, since they know people would only want to spend far lesser in these times.
As a new or existing business, you can take advantage of the low priced sales flowing through the market, and buy important items for your business that you would otherwise have paid high sums for. This way, you cut costs while you achieve more.
2). There Are Lesser Competitors:
It’s difficult for many new businesses to startup during an economic crisis, because of the low access to funding at the time. Businesses that would have otherwise given your business a run for your money, would have a hard time convincing investors and banks that their business model is recession-proof.
Since you know there’d be lesser startups during an economic downturn, you should work towards starting up a business that solves a real problem and also has some adequate funds to push it through the crisis.
Lesser competition then means faster sales and growth for your business.
3). People Are Looking For Ways To Save Money:
People want to spend little to nothing during an economic crisis. The mere fact that their purchasing power, income, and maybe even their jobs have been affected, means they’re in no financial mood to part with cash on just anything.
Knowing this, you could take advantage of the fact that you’re a new company with low expenses, to sell your products and services to these consumers at a very low price. Doing this will not just make them your customers, but would also retain their loyalty to your brand long after the economic crisis has subsidised.
4). Lower Interest Rates On Loans:
During an economic crisis, the central bank moves to lower the interest rates on loans from banks, in other to trigger an increase on both the capital lending rate and consumer spending rate.
Local production, lesser importation, and more investments are critical to get any country out of a recession, and one way to achieve this is by lowering the interest rates on bank loans. The lower the rates, the more businesses can loan, and the more investments that goes into the country.
See Also: How To Survive A Recession In Nigeria
5). People Are Looking For Innovations:
In a recession, people are looking for businesses that can come up with creative ways to solve their problems at an even far lower cost than they currently pay for. Startups especially, are looking for innovative business solutions that don’t just make their business operations easier, but also generally lowers their overall expenditure.
When you build innovative solutions that solve consumer problems by making their lives a lot easier and saving them more money, you can grow a profitable business that’d scale through the crisis.
What are your thoughts on these 5 reasons the best time to start a business is in an economic crisis? Let me know by leaving a comment below.
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