The Benefits of Starting a Business During a Recession

I’ve been told that I’m a bit of a Pollyanna. When you ask me if the glass is half full or half empty, I’m likely to tell you it’s overflowing. So it was when I addressed the New Haven Professional chapter of Net Impact.

small business grand openingIt’ll be no surprise to my friends when I say every dark cloud has a silver lining. Even when it is a storm cloud of epic proportions like the recession we’re in now.

What makes it possible for new companies to launch in bad times?

  • Less to lose. If you’ve been laid off, are concerned about being laid off, or your business has diminished, you’re not giving up the safety of a regular paycheck and benefits. You’re surviving!
  • During downturns, the marketplace changes more quickly and dramatically. When change happens, opportunities present themselves to those who know where to look and can be flexible to exploit market conditions. Large companies tend to be slower to respond than small and midsized enterprises, due to cumbersome bureaucracy and layers of approval. Think elephants vs. gazelles.
    • Competitors weaken and some even go out of business, which creates an open space for smarter, more resourceful players.
    • Customers are more likely to re-evaluate their brand loyalties as they seek less expensive alternatives.
    • Quality talent becomes more affordable. Not just because people have been laid off but because, in light of large corporation vulnerability, they may be more willing to take a chance on joining a startup. Some small company vendors and freelancers may become more flexible on payment, although the reverse may also be true. Vendors can also become more rigid about payment or require more substantial monies upfront.
    • Some goods and services become more cost effective. Overall, many products and services become more affordable as the market price waivers and vendors find it necessary to slash profit margins. Prices for office space has dropped around the country. You may be able to buy used office products on the cheap such as office furniture. Vendors may become more willing to negotiate better terms. In fact, some vendors may be willing to barter services or take a percentage of the company in exchange for the providing the products and services you need to get started. This is a strategy I’ve employed starting my own businesses.
  • Recessions toughen you. Remember the` old adage: “what doesn’t kill you makes you stronger.” Adversity brings out the best in entrepreneurs – creative problem-solving, healthy deliberation about spending, strength and perseverance.
  • Downturns force entrepreneurs to scrutinize their ideas. During hard times, entrepreneurs need to look long and hard at their business ideas before moving forward. A recession forces a keener evaluation.
  • Get a leg up. The skills that you learn by starting in lean times makes your company stronger when economic health returns. Being creative and resourceful are skills that never fall out of favor. 

Starting a business is about strong well-thought-out ideation, thorough understanding of your markets, timing and seeing a great opportunity when it hits you in the face. What might seem out of reach for one person is reachable for another. Is this the right time for you? Only you can decide, but if you share your ideas, I’ll provide some feedback.


Thanks for this post...

I have been kicking around a unique approach to a known business for about 3 months and until November 20 - had really been dragging my feet. Had an awesome meeting with a C-level executive of a Fortune 500 company who not only encouraged but opened their blackberry of contacts to me. It has been an amazing snowball effect ever since.

Point - When you have an incredible idea, discipline to plan and motivation to execute your plan - nothing else matters. Nothing.

Thanks for the added encouragement today when I came across this post.

Way to Go Denise

I'm delighted that my blog post has provided encouragement. It's really hard taking that first step. Keep on stepping.


"Competitors weaken and some

"Competitors weaken and some even go out of business, which creates an open space for smarter, more resourceful players"- what do you mean under this quotation?
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My thought

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According to "USA Today," a

According to "USA Today," a recession may be the best time to start a new business.Many well-known businesses began during a recession, such as Disney and Microsoft. With a bit of research, careful planning and frugality, you might discover that now is the time for you to launch your dream.

My thought

Aw, it was a top quality content. Actually I would like to write like this as well - taking time and real energy to bring about an excellent post... however what can I say... I procrastinate an awful lot and by no means appear to get things completed...

Benefits Starting Business

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Starting your own business in

Starting your own business in a recession is a good idea as it offers several benefits – especially less expenses on capital investments. You also get qualified people who lost jobs. Other reasons are many other businesses want to change their suppliers, business ownership would lead to tax benefits, and suppliers give better credit and offer better deals.

Now is the time

Its so easy to be paralyzed with fear as you mentioned. However I agree that this environment is great for starting a new business or rebuilding an existing one. As a project manager, its great to see the companies that have the foresight to invest in rebuilding their companies now while business is slow. This way, once the economy turns around, they will be better able to handle the new business.

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You know precisely what your talking about, exactly where other people are coming from on this issue. I am glad that I had the fortune to stumble across your blog.

Has worked for me

A really good post, and shows that if you work at it starting a business when economy is down is the best way forward. I my self have done this, although a little slow, it has proved to be successful, and starting in a recession means the only way is up!


And good luck going forward. Starting a business at any time -- good or bad -- is never easy but it can be very rewarding nonetheless.


Thanks, that is some food for thought! Now if only I had the cash! =)

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