Creating a Business in a Recession

business in a recession
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During turbulent times, you would be surprised how much uptake there is in self-employment. Given the events that have unfolded in recent months, it will not be surprising to see more people make the jump and go into business for themselves. 

People have spent months at home after having their jobs deemed non-essential. Some have spent those months providing their services for free, from home, to charities on a freelance basis. 

Regardless whether the work you do can be done from home, or you have an idea for a service or product you could bring to market and make a decent profit doing it, the fact that the economy is down is likely to put some people off. 

Truth is economies bounce back after downturns, every time. It is only a matter of when. Nobody knows when that will be, but you can count on people spending where it saves them money. 

Any service that will save money such as a car repair service, or increase the sale price, such as the sale of a home, is likely to be high on what people will spend on. 

Think of businesses like mechanics and interior designers who provide home staging services. Even the storage companies used by home movers while they are waiting for the keys to their new property can be deemed extremely valuable. After all, a car owner is more likely to spend hundreds on repair work rather than fork over thousands for a new car. For home sellers, they are willing to pay home stagers to increase the marketability of their property to get it sold faster and possibly for over the asking price. 

These are the types of services that usually do well during recessions. The type that saves people money or helps them make more money. 

Another type of business that would be foolish to ignore is what is referred to as hobbyist businesses. These can range from cake suppliers to candle makers, right through to woodworkers making their own carpentry products, be it garden furniture, kitchen cabinets or custom-built wardrobes and storage units. 

While most types of businesses can be started with a good chance of success from the get-go, what you need to consider for things you find relaxing as a pastime, or use as a way to escape the daily grind, is that once you mix pleasure with business, it may no longer give you that escape you once had with your hobby. 

There will be pressure, goals to meet, numbers to crunch, customers to take care of, and marketing to do to keep the business moving forward. 

All those areas are the reason for the “follow your passion” advice because without a passion for the work you do, self-employment will deplete your energy. 

No matter whether you plan to turn a hobby into a business venture, monetise your skills by becoming an independent contractor or create your own products to sell in the marketplace, the only thing you need to find are people willing to pay for your products, service or advice based on your expertise. That is the most difficult part, apart from financing your business, which is difficult in the best of times, but fortunately, most types of businesses can be started on the side and scaled from there. 

If you are currently grappling with the idea of venturing out on your own into self-employment, it is advisable to do things gradually, especially if you’re still in employment. That way, you can pick up clients or customers in your spare time, make some profit and gradually scale until you have enough cash flow on reserve to focus on growing your business strategically. 

 

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