Many people are scared of starting a business during a recession. Times are tough, and people are not spending — which makes the idea of starting a business in a downturn even more daunting.
But an economic downturn shouldn’t stop you from pursuing your business endeavors. As they say, the right time to start business is when you have a great idea, recession or not. With the right business idea, where your product or service will benefit customers both in good and bad times, you can beat the odds and succeed even in an economic downturn.
The key is to look long and hard at your business idea to see if this is a business where a market truly exists. After all, with a recession comes the tightening of purse strings not just from customers but bankers and investors alike. That means starting the business lean, and well, possibly even with your own money.
Here are some types of businesses that thrive and stand a better chance of survival during economic downturns:
1. Must have products and services. Food is one business that remain strong during a recession. Afterall, people will still need to eat and drink no matter how bad the economy, though many will be cutting dining out and instead stay at home and cook!
And guess what, demand for cosmetics remain strong even when times are tough! Demand for cosmetics seem recession proof as women continue to indulge themselves by buying lipsticks and powders. Ask any woman on the street if they will forego wearing a lipstick and you might get dagger stares everywhere. There’s even an economic indicator for it: the lipstick index
Other necessity businesses include automotive repair, healthcare, web sites for small businesses, education and learning products.
2. Sign of the Times-type businesses. These are businesses that are most needed during a recession, yet will still generate strong demand even when times get better. An example of this type of business is bargain hunting, helping people find deals, coupons and discounts. Whether good times or bad, people want to save and get the best deals, but more so when everything is tight.
3. Any business with minimal startup costs. Now is not the time to risk your family’s life savings into a business you are not sure will work. Home-based businesses are great during recession because of little to no overhead costs. You can start a blog at no cost working from home monetized by advertising, which can allow you to earn decent income. If you’re lucky and your blog or website catches on, you can earn spectacular income workin from the comforts of your home without the headache of an office or retail space lease.
4. Start a proven business. It is significantly riskier to start an unproven business from scratch as compared to starting a well known franchise. Franchises may sometimes feel that you are working for somebody else, but buying into a franchise allows you to start a business with a well established brand, fully developed operational systems, and with products or services that are proven winners.
Once you’ve decided what business to start, follow the tips shared by experts in the article Recession Strategies for Small and Home Businesses