Hi, everyone. This is Alejandro Cremades, and today we’re going to be covering the
reasons to start a business in a recession. Starting a business in a recession can sound
very challenging and very tough. There are, obviously, the negatives, and there are also
positives. In today’s video, we’re going to break down for you the main reasons why
it makes sense to start a business in a recession, and we hope that this video provides a ton
of insights for you. So with that being said, let’s get into it.
Recessions and dips are always a great time to start a business. There is going to be
less competition, there are going to be less people that are taking that leap of faith,
and also there is going to be less competition when it comes to raising money. Why? Because
then, money is drying up, there are going to be less businesses, too, and people are
increasing their expectations on some of those new businesses that are launching.
So, this is a good opportunity to get buttoned-up and to get out and make something meaningful
because, typically, in moments of crisis, businesses typically contract, so by going
the other way, like going against the current, that’s essentially what people are not anticipating,
that’s what people are not doing, and how it’s going to give you an edge.
In some of those crises, recessions, depressions, there have been great businesses that actually
started. Like, in the last crisis, for example, when the market turned around, we had incredible
businesses like Dropbox, Airbnb. So companies that many of you today are actually using
and that are worth billions of dollars were actually started during a really tough economic
time. There is also less competition. When you’re
thinking about marketing alone, think about it. All those people that were supposed to
compete against you that had cash and were able to spend, now they’re going to be contracting.
Now, you’re not going to have as many people trying to bid or to demand certain things
because they’re not going to be investing the money. So, here, you have less competition,
less people targeting your audience, the people that are going to potentially buy your product
or your service. So it’s a really good time to get out there and get the word out there
– Brandshare, Mindshare, you name it. It’s much cheaper, also, and this is a great
reason. The labor is going to be cheaper. There are going to be more people looking
for jobs. Also, there’s going to be the cost, 2for, starting up. You’re going to
get discounts left and right, so all around, it’s going to be much cheaper. Before, people
were probably increasing the prices given the demand. Now, there’s not as much demand,
so this is your opportunity to capitalize on that and to try to optimize the cost – whatever
it’s costing you to get your product and your service out, and to maximize the benefits
and the ROI, the return on your investment that you’re getting back from those operations.
It also gives you time to perfect before the next boom. What this means is that you get
to optimize your funnel, you get to see what’s working on the product, what’s working on
the marketing. Then, when the next market comes, when it goes from bear market where
everyone is losing money to bull market where everyone is winning money, then you’re going
to be able to ride the wave better than anyone because while people were contracting, you
were essentially optimizing everything around your business and ready to scale and ready
to ride that wave better than anyone else. Urgency can be a great reason. If you’re
developing, for example, a product or a service that is going to be addressing specific needs
of those that are perhaps not having such a good time during a downturn, perhaps there’s
going to be more urgency on your end to buy that product or service from you. So that
urgency is something that you can absolutely capitalize on. You’ve seen this from people
that are lending money, or people in those industries that could help with optimizing,
with working remotely. Basically, things that are going to come or are going to pick up
when people are trying to reduce the cost, to reduce the burn rate of how much they’re
spending on the business, and so forth. Also, the access to friends and family money
is going to be great because here’s the thing. Friends and family are always going
to be investing in you because they love you. Here, at this point, especially when you’re
in a downturn where the stock market is not performing as these people would have hoped
for, investing in you is going to help them to shield their money from that volatility
that is happening in the stock market. What you can do here is get them to invest
in your business, and perhaps even if there’s not going to be liquid, meaning that they
can’t get their money back like day-in and day-out, what you’re doing is, you’re
creating that protection on the money for the next five to seven years until your business
is sold, or acquired, or whatever that is. It’s providing them the opportunity to avoid
that volatility and to get that money somewhere else that is privately held and doesn’t
deal with those uncertainties and events that are happening in the market.
Also, starting your own business is really fulfilling. It’s much better than job hunting.
It’s much better than getting hired to build the dream of someone else because if you don’t
build your own dream, as the saying goes, someone is going to hire you to build theirs.
I would love to hear on the comments section what you’re up to and what idea you’re
thinking about executing. Also, Like this video and subscribe to the channel so that
you don’t miss out on all the videos that we’re rolling out every week.
Then, take a look at the fundraising training, which is the program where we help from A
to Z with everything related to fundraising. There you’ll find live Q&As, agreements,
templates, a community of entrepreneurs helping each other all over the world, and you’ll
find tremendous value in it. Thank you so much for watching.