This year, the UK general election threw the business world into a period of uncertainty, which was reflected in the stock market at the beginning of this month. Now the election is over, the business world is feeling a little more stable and companies across the country are focusing on the slowly-but-surely growing economy.
However, a young business or an emerging entrepreneur should never feel they cannot start or grow a business until we see boom times again. My Parcel Delivery was launched in 2010, not too long after the financial world caved in on itself, sending shockwaves through the global economy.
In fact, an economic downturn is as good time as any to start a new business. Last year, saw the record numbers of start-ups launching, with 581,172 new businesses registered at Companies House in 2014. If you can make it during an economic downturn, then just think how you will prosper in a flourishing economy.
Here’s my five good reasons why it’s good to start a business in a downturn:
1. People are looking to save money
When times are hard, everyone wants to save money, so any newcomer which can offer financial savings is onto a winner. We launched My Parcel Delivery in part to help consumers and businesses save money, but also to give them a much easier way to send parcels, with dozens of choices to suit their needs.
2. It’s a good time to innovate and re-invent
An economic recession shakes up the status quo and consumers in general are more likely to be open to change and new ideas. This is a great time to innovate and challenge existing businesses and ways of working. My Parcel Delivery not only pioneered a new way for consumers to send parcels but it also made their lives a lot easier by helping them to avoid post office queues.
3. Think lean
Starting a business without huge loans or massive investor deals means you need to think very carefully about when to spend money and when to hold back. A small innovative newcomer is naturally agile because there is no management hierarchy to slow down decision-making or legacy suppliers with long contracts. If something doesn’t work, you can change it or scrap it immediately.
4. Big competitors are disadvantaged
Larger and more established companies will suffer in a recession due to high cost bases and so have to trim down costs just to stay competitive. This makes it incredibly hard for them to compete with a young, nimble business who can flourish without massive overheads.
5. Everything is cheaper
In a downturn, everything you need to set up a business is cheaper and up for negotiation. For example, renting office space is easier when landlords are desperate to fill their vacant units. You can even visit auctions for office furniture and barter for better deals on IT equipment and software.
Don’t put off starting that business – some of the biggest businesses out there were started during difficult economic times. Just take advantage of everything the situation has to offer and remain flexible, agile and competitive – in every sense.