When the overall economy is slumping, as it currently is, people begin to focus just on surviving—success is simply defined as the ability to pay bills on time. So, why is now actually the best time to start a business? Well, for one thing, there is less competition during recessionary times. Too many people are focused on surviving, not thriving. Challenging times actually create new opportunities since shifted priorities mean new needs must be filled. New businesses that can adjust to and overcome these difficult times have the great opportunity to enjoy a head start for gains when the economy turns around, which it inevitably will.
Recessions force prices to drop—office space and wages are low. The top five cities in amounts of office space sold during the second quarter of 2012 include Oklahoma, Houston, Seattle, Denver, and Chicago. We’re also able to do a lot with very little thanks to new technologies. Cloud technologies have made businesses both more efficient and more affordable. The total cost of owning a rack at a data center is approximately $120,000 over the data center’s average 10 year lifetime, compared to roughly $47,000 at the cloud.
The biggest recession tip is this: focus on thriving, not just surviving. A billion dollar software tech company is founded every three months, which should serve as tremendous inspiration. We’re so accustomed to traditional funding sources for new businesses: small business bank loans, venture capitalism, angel investors, and asset backed funding. Today, however, there is crowd funding, the practice of funding a project by raising small amounts of money from a large base of people, typically via the Internet. This new sourcing method provides individuals an opportunity to succeed, regardless of economic times.
How do you feel about starting a new business during economic recessions? Please share your thoughts in the comments and check out the infographic below presented by ProfitBricks to learn more.