Should You Start a New Business In A Recession? Definitely!

Okay, I gave away the answer in the title, but I just couldn’t wait to tell you.  There is a lot of talk about the recession lately.  The world economy is on magic mushrooms, and stock markets go up and down by 10% in a given day.  All you hear on the news are stories about people loosing their homes, businesses going bankrupt putting thousands out of work, Armageddon.  Are we in a recession or aren’t we?  The media is selling fear, worry and panic, and the general public can’t buy enough.  The candidates for President of the US keep saying that the country is facing the biggest economic crisis since the Great Depression.  They wouldn’t be setting themselves up to be a huge hero when things turn around, or have a good excuse if they don’t, would they?

Let’s assume we ARE in a recession, and we are facing this huge economic downturn.  So What?!  That may seem cold, or uncaring to people facing hard times right now.  It’s not.  I’m just saying that worrying about it isn’t the answer.  You may have already been affected by the economy in some way, or maybe you haven’t. If you have, make a plan.  If you haven’t, MAKE A PLAN.  Don’t get sucked into the vacuum of panic and paralysis that is sure to grip so many small business owners.  Change your tactics.  Adapt to the market- like you always should. If you don’t think a business can survive hard times, and the great Depression wiped out everything, think again.

Do a google search on companies that thrived during the Great Depression, and you’ll see I’m right.  You’ll find that the common thread among the companies that demonstrated the highest level of growth and sales was that they advertised heavily.  Want examples?  Proctor & Gamble has a policy of not cutting advertising budgets during times of recession and they have made progress in every one of the major recessions, and the Great Depression.  During the ’20s Fords were outselling Chevy’s by 10 to 1.  In spite of the Depression, Chevrolet continued to expand its advertising budget and by 1931, the “Chevy 6” took the lead in its field and remained there for the next five years.

Doesn’t this make sense?  People don’t just stop buying things in hard times.  Now if you sell Lear Jets to stockbrokers, I probably can’t help you, but if you have a product or service that gives true value to your market, then you can not just survive bad times, you can thrive in them.  Should you start a new business in a recession?  Absolutely.  All of the same rules apply.  Define your market.  Find what they want, and sell it to them.  Don’t try to sell them what you think they want.

Become an expert marketer.  Learn all you can about promoting your brand, and then DO IT.  Companies will be slashing advertising budgets, so you should increase yours.  When competitors start disappearing from the marketing landscape, it is a precursor to their permanent disappearance.  In hard times, advertising costs drop, as advertisers slash budgets.  This is a huge opportunity.  If you can negotiate, there will be some great bargains out their for advertising.

If you have a good product or service, find an angle why it is important to keep using it in hard times. If you provide business services, stress the importance of your product to your customer, and show them how it will help them survive the hard times.  Entertainment or leisure? Stress the importance of staying sane in hard times by maintaining your personal relaxation routine.

True courage is not the absence of fear, it is the abilty to act in spite of it.  That isn’t a Startup Daddy original, but I was lucky enough to learn that lesson as a young child and it has influenced my attitude about fear, my whole life.  It is okay, normal, to be at least a little fearful about starting a new business in a troubled economy.  Don’t let that fear keep you from acting.  Use is to keep you sharp.  Do your research.  Fortunes are not just lost in hard times, they are made.