Reasons to Consider Starting a Business in a Recession

[rogercbryan]

This goes along with another thread I started. These is NOT my words. This came as part of an email from LegalZoom.com.

I thought it was good information so I'm sharing it with everyone....

Reasons to Consider Starting a Business in a Recession
Author(s): Heleigh Bostwick

Are you a stay-at-home parent who doesn't want to go back to the workplace? Someone who was fortunate enough to retire early? Or just someone with a great business idea? Don't let bad economic times deter you from starting your own business. Experts claim that starting a business in a recession can be a good idea. In fact, many successful companies have gotten their starts during economic downturns.

So what makes a business succeed during a recession? Here are five reasons that starting a business during a recession might be right for you.

1. You have a Sizzling Idea

There are lots of red-hot ideas, but finding one that can make you money in hard economic times is a different story. Think about how your spending habits have changed when times are tough. Do you shop online more so you can easily comparison-shop and save on gas money? Are you a parent who sees the need for eco-friendly baby products and clothing? Are you sending more e-cards than paper cards? Do you have an idea that answers the needs that arise during tough economic times?

2. You have an Excellent Credit Rating

If you have an excellent credit rating and low balances on your credit cards, banks will be knocking down your door to get your business. Take advantage of that to negotiate 0% financing on a loan or credit cards to use for start-up capital.

3. You have Out-of-This-World Negotiating Skills

Negotiating deals at the bank is somewhat dependent on a good credit score, but even if you have less-than-stellar credit, you can get a loan with favorable terms. If you're skilled at negotiating deals, and have the chutzpa (and a marketing plan to back up your business idea), then there's a good chance you'll walk away with exactly what you want.

4. You are a Money Manager Par Excellence

Are you able to make ends meet despite being on a shoestring budget? Are you the one your friends come to for financial advice even though they make way more money than you do? Then you're probably pretty good at managing your money, a must-have skill when starting any business, but especially one during a recession.


5. You are Disciplined and Detailed

If you're the type of person who's disciplined, thorough with details, and not prone to making impulsive decisions (money-related or otherwise), then starting a business during a recession will probably be a successful endeavor for you.

The bottom line is that if you're ready to start a business, don't let a recession decide whether it's a good time or not. If you've got what it takes and the right mindset, the time is now. After all, good ideas are always in demand. If you're ready to get started, click here.

Stay Motivated! (That is from me)

[jasaunders]

While I believe all five of those are good traits to have in starting and running a business, I don't see where the author related them back to the topic, which was "Reasons to Consider Starting a Business in a Recession." The key word being recession. The article doesn't say why those traits would be more important during a recession than during a boom or any other time. In fact, those are always important traits to have, recession or not. Plus, they aren't so much reasons to start a business as they are traits in a person that leads to starting a successful business.

[rogercbryan]

I guess when I took out all the advertisements for their incorporation services, trademark services.... blah blah blah... it lost its full message. This is basically a marketing ploy by them to sell their services in a 'recessionary period'

[butler68]

I find that more people build business plans when the economy is no doing well.

[jasaunders]

Right, that is true, recessions are great times to build businesses for many reasons. I have some in mind, but don't have time to write them all, I've got to run. But let's open this up to a brainstorming session....

Why might a recession be a good time to start a business? What advantages are there during a recession compared to other economic periods?

[ChadFraz]

There are a lot of "advantages" to starting a business during a recession. I am the Director of Sales (big title, blah blah blah) for a national online start up company that is currently searching for our second round of VC. We have been in business for over three years and are definetely moving in the right direction.

What I have noticed in the past year is that our competition has decreased. Other businesses have failed where ours has grown. We haven't seen any other companies attempt to penetrate our market (rental industry) since the economy has gone down.

To clarify, if you have a solid business plan and the money to take you through a recession I think this is a quality time to start. Entrepreneurs are generally risky to begin with but I think an economy like the one we are dealing with will cause even the most bold to hesitate. I can't think of a better reason to start a business now than a lack of new competition.

I know that competition isn't necessarily a bad thing. Industry competiton breeds innovation and growth. When the market returns I expect to see an incease in this which is exactly what we will need at that specific point.

[selfemploymentcoach]

I believe that starting a business during a recession can sometimes be good business.It really depends on the type of business you are going into. The only thing that I do know is that statistics are showing 42K resumes posted vs. only 18k jobs in my state. I look at it like this... I would rather be self-employed and hold my fate in my own hands than be suddenly unemployed. Recession or not ? It is more about where you are and what you want in your life and how you choose to live.

[Scott Bradley]

Starting a business in a recession is probably the best time because no matter what kind of economy we are in...people are still buying stuff.

One other thing to note is that their needs change in different economic times...Thus open up many opportunities.

There is always money to be made somewhere in any economy, as the entrepreneur we have to figure out what way would be best!