Recession-Era Entrepreneurship

It might seem like a recession would be a terrible time to launch a new business, but actually there are some great arguments in favor of recessionary economies as a prime time to engage in entrepreneurship.  If you're struggling in a sagging job market, ready to change careers, or have a brilliant idea for a new company, right now could actually be a great time to act.

One of the biggest struggles when you launch a new enterprise is controlling overhead costs.  Recessions offer ample opportunities to land a great office, warehouse space or manufacturing site at fire sale prices.  Commercial real estate units see higher than normal vacancy rates (unfortunately, due to other businesses failing), and rent is typically cheaper than the square footage rates you'll see during boom times.  Equipment is another area you realize big savings.  Reasonably priced used equipment, furniture, fixtures and vehicles will be on the market, and pricing for new items is usually highly competitive.  By setting your business up as cheaply as possible and locking in low lease rates long term you can ensure low overhead during your crucial early years.

Talent is another vital component to the start up game.  In order to succeed against better funded, well-established competitors, you have to be able to pull the best and brightest into your company as early as you can afford them.  During a recession good talent is plentiful and inexpensive because people need jobs and are willing to work harder for less money.  If you can draw some key players into your inner circle for a song, they'll be appreciative for the position during a tough time and strive to make your new venture a success.  And, as the economy recovers and the job market eases, you'll ideally be in a position to pay higher wages and sweeten deals for proven performers to keep them on board long-term.

Lastly, recessions place a great deal of stress on existing businesses.  And that stress opens the door for them to make mistakes and scramble, leaving you a prime opportunity to steal their customers.  There is no better time than a recession to capitalize on a dominant market player who decides to cut customer service staff, slash marketing budgets, close locations and generally annoy their customer base.  Their stumble can become your big break, and offer a great chance to snap up customers that would never have switched to your company without a major failing on the part of the known brand.

So, while launching a new venture is never easy and you'll certainly face obstacles, there are some really great reasons to invest your time and resources in founding a new company right now.  When the market is in flux and transition is everywhere - that is the time to make your move.