How to Start a Business During a Recession
For me, it’s hard to think of it any other way. Nearly right after, I started my recruitment agency, I found myself in the midst of one of the worst recessions this country has ever seen. Though, after getting things going, bad job numbers and economic news that was nothing short of horrid became the norm and I survived.
So, how do you start a business during a recession? I don’t have all the answers, however here is how I did so included with some tips that any entrepreneur owning a cyclical business such as a recruiting agency should implement to heighten their odds of success.
1. Keep Costs Down – The best businesses can generate the most money with the least amount of expenses (employees, employee perks, lavish office space, etc.) When I first started my executive search firm, I associated lavish spending with success.
We all have our odd thoughts and the correlation between spending and business success was one of mine. Don’t make the mistake I did as it nearly put me under. Control your spending.
Enjoy the ups, but always prepare for the downs.
2. Broaden Your Target Market – When there is not much antelope to hunt, wild cats still do their best to ensure survival. Metaphorically speaking, make sure that you have contingency plans if your target market goes through some economic woes.
This also includes avoiding being reliant on a single client (regardless of size) for revenue generation. While you want to maintain expertise, during a poor recession, you may have to take the time to broaden that scope.
3. Be Flexible on Price, but Not Desperate – When you go to the negotiation table with clients, you may have to be flexible, but remember that once you price a potential client, you have to stick to that price for a long time and, sometimes work excessive hours for that money.
Don’t give away the farm simply out of fear of the economy. Be professional and explain why you charge what you do. If you come across with clarity and sincerity, your target market will typically pay your asking price or close to it.
In the End
Starting any business is difficult and takes a lot of dedication. Regardless of economy, I don’t see a reason why someone with this type of dedication and passion should not go on to be an entrepreneur.
Though, I must stress the words dedication and passion because during a bad economy, it takes that much more of both.
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This is really good stuff….I’m in the MLM business and the same rules basically apply!
Thanks so much…glad it was helpful ; ).
As an entrepreneur who has weathered ups and downs, I couldn’t agree more with the tip to keep your costs low (get rid of all that unnecessary overhead). Also, when you absolutely need work, be flexible – but don’t compromise yourself.
That’s the way I try to negotiate fees. When you give too much away, the client stops respecting you. When that happens, you’re doing too much work and they expect more and more.
Thanks for reading.