Reasons to Start Business in Tough Economy
A weak market can be a great time to get your business off the ground, but frugality cannot be urged enough. You’ll need to be twice as smart to make it with half as much. Success during a recession also demands you to understand what the market is like and whether or not your business would be viable starting in trying times.
Lower start-up costs
You might start off with less capital, but prices are going to be a lot cheaper than they would be in a healthy market — especially if you hit some auctions. Deflation, combined with lots of repossessed assets, ease start-up costs. This is especially important to first-time entrepreneurs because, in the event that your business goes belly-up, you won’t be losing nearly as much as you would have if you started during an uptick in the economy.
Competitors are also on same level
Another reason starting amid a recession can be great, is because your competitors are making all sorts of internal changes and budget cuts. They might be laying people off, lowering prices, losing clients and customers and possibly shutting down. This, of course, is perfect for you: the layoffs allow you to recruit experienced employees who would be willing to work for a little less, the loss of clients leaves the market wide open for your business and, in the event that someone in your market shuts down, the world becomes that much bigger.
The market will get healthy again
No recession is permanent. The market is cyclical. Though you’ll be starting with lower prices and a much tighter budget than you’d like, these times will pass and you will begin to see an increase in sales and more revenues. Prices will rise. Things will become more manageable, and once they do, you’ll be able to reap even more benefits from it because your business was so cost-effective to start within the recession.
More talent on the market
The recession will put tons of experienced, talented people out of jobs. People will be less selective about their employment and more people will be interested in partnerships because they’ll either be uninterested in re-entering the workforce or they’ll be entrepreneurs who watched their businesses fall to the recession. Assuming you have the funds and a well-planned business, you can recruit talent you may not have had access to otherwise.
This blog is written by Ms. Heena Arora, Partner Relation Executive at Flyingcolour Business Setup, VAT and Accounting Services, Dubai. If you have any question regarding establishing business in Dubai or anywhere across the UAE then please contact us at +971 4 4542366 or email us at info[at]flyingcolour[dot]com.
